Big business is urging the Morrison government to change workplace laws after a landmark court ruling found long-term casuals are entitled to paid leave.

The court found on Wednesday that casual workers employed on a regular, permanent basis are entitled to annual, sick and other leave entitlements.

The decision against labour hire company WorkPac upholds an earlier ruling against the company that confirmed long-term employees should get leave provisions despite casual loadings.

Employers fear a flood of class actions could result in back-pay claims of up to $8 billion, while unions have celebrated a major win.

Industrial Relations Minister Christian Porter has supported employers throughout the case and said the decision would have immediate implications for businesses at a time when many had taken a huge hit from coronavirus.

He said the government would consider joining High Court appeal if one were to be launched, but would not take the matter to the court itself.

“Given the potential for this decision to further weaken the economy at a time when so many Australians have lost their jobs, it may also be necessary to consider legislative options,” Mr Porter said.

He said talks would be held with unions and employers to get a resolution.

Labor’s industrial relations spokesman Tony Burke said legislation would be a betrayal of Australian workers.

He said companies using casual contracts for permanent jobs were taking advantage of workers.

“If there’s any double dipping going on here it is being performed by the employers – they’re taking advantage of the insecurity of casual work while still getting permanent hours out of their workers,” he said.

Mr Burke also questioned idea Australian workers could collectively be owed as much as $8 billion.

“That would only be the case if there has been widespread breaking of the law by Australian employers,” he said.

“I certainly hope that’s not the case.”

CFMEU national president Tony Maher said the Federal Court decision passed the pub test on the definition of casual.

“This is a fantastic decision that puts an end to the permanent casual rort that has become a scourge in the coal mining industry and across the workforce,” he said.

“Employers must now stop with the nonsense that calling a worker a casual makes them so.”

But Australian Industry Group chief executive Innes Willox said employers could be slugged with an annual leave bill between $5.7 billion and $8 billion.

“An employee engaged as a casual and paid a casual loading should not be allowed to turn around years later and claim the entitlements of a permanent employee, like annual leave,” he said.

Australian Mines and Metals Association chief executive Steve Knott said the prospect of six years’ back-pay could send businesses to the wall.

“This is a remarkable position that is highly damaging to business confidence and will see more internationally funded class action law firms, many with obscenely large contingency fees, circling Australian businesses like sharks,” he said.

AMMA and Ai Group want the government to change the definition of a casual employee as one that has been “engaged and paid as such”.

Australian Council of Trade Unions secretary Sally McManus said insecure work was out of control and needed to be reduced.

Labour hire companies & some employers thought they could get away with slapping the label “casual” on a worker when they have a regular, ongoing job to cut wages & rights. Not anymore. Well done @tonymahercfmeu https://t.co/FUooyNlohd

— Sally McManus (@sallymcmanus) May 20, 2020

“It’s time for employers to accept that finding new ways to make permanent jobs casual has to end,” she said.

-with AAP