Unions have blasted Industrial Relations Minister Kelly O'Dwyer's decision to intervene in a potentially landmark court case about casual workers' pay and leave entitlements.
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Labour hire firm WorkPac has filed an application in the Federal Court seeking declarations a former employee, Robert Rossato, was a casual employee and not entitled to be paid leave entitlements.
The Commonwealth will be a party to the test case, which comes after an earlier ruling that found a casual truck driver employed by the company, Paul Skene, was entitled to an annual leave payout.
WorkPac's submission relies on the earlier decision being wrong and materially different from Mr Skene's because there was no firm commitment about rosters.
Ms O'Dwyer said the federal government had intervened to give certainty to millions of small businesses.
She said it seemed completely incongruous casuals getting a 25 per cent loading could also get holiday pay and other entitlements.
"It's generally one or the other but not both and that certainly needs to be made very clear," the minister told reporters in Canberra.
Employers have raised fears the ruling could lead to "double dipping" of entitlements.
"We know that this particular case has caused great alarm for small businesses right across this country," Ms O'Dwyer said.
Australian Council of Trade Unions president Michele O'Neil denied the first ruling was double dipping, saying Mr Skene was paid 30 per cent less than his permanent colleagues not employed through labour hire.
"The court has looked at the circumstances and said 'this isn't casual, this is fake casual and he's entitled to be paid his accrued annual leave'," Ms O'Neil said.
She criticised Ms O'Dwyer for using taxpayers' money to back big businesses which have cheated entitlements from casual workers.
"It is one thing for the minister to do nothing but then actually go another step and say she's going to back big business against ordinary working people is something we don't accept," the ACTU president said.
The Federal Court in August found Mr Skene, who was employed under a labour hire arrangement, was not a casual because of his regular pattern of work.
Australian Industry Group chief executive Innes Willox welcomed the government's decision to get involved in the case.
"Casual employment plays a vital role in Australia's labour market. A loss in flexibility in this area would destroy competitiveness and jobs," Mr Willox said.
Australian Associated Press
