Last Thursday’s decision by the Full Federal Court may change the idea of ‘casual employment’ for the future, causing upheavals on the employment law scene.
Rarely has a court decision incited such comments from employer groups and other sources as that on Thursday, when the Full Federal Court brought down a decision that has far-reaching implications for the future definition of casual and permanent employees.
The case is that of Workpac Pty Ltd v Skene. Workpac is the largest Australian owned recruitment and labour hire company in the country, providing labour for the mining industry. Paul Skene was employed as a dump truck operator at coalmines in Queensland.
He had signed a casual employment contract, but when he was dismissed for misconduct, he claimed that he was continuously employed by Workpac and was entitled to six weeks of annual leave as well as an annual leave loading. Workpac submitted that he was not entitled receive any such entitlement on termination of employment as he was not continuously employed on a series of separate engagements.
Does casual employment have a definition?
The Fair Work Act provides an entitlement to annual leave to employees “other than casual employees”. However, the term “casual employee” is not defined under the FW Act, and Judge Jarrett pointed to the following:
- the employee’s regular and predictable employment according to a set roster with lack of choice in work arrangements or shifts,
- his continuous employment,
- the expectation that he was to be available on an ongoing basis to perform the duties and the FIFO arrangements.
Judge Jarrett was satisfied that the Employee was to be considered as “other than a casual employee” and therefore had an entitlement to annual leave.
This is where the storm of comment began.
Innes Willox, chief executive of AI Group, said the decision was “disappointing” and has asked the federal government to intervene to clarify the law, adding that the widespread industry practice was that “an employee who is engaged as a casual and paid as a casual, is a casual for the purposes of award and legislative entitlements”, and that the Fair Work Act should be clarified to reflect that.
CFMEU national president Tony Maher said the decision challenged a flawed business model used by labour hire firms. “It means the end of the so-called ‘permanent casual’, which was always a rort,” he said. “The labour hire industry will cry foul over this decision – the answer for them is to employ people under proper workplace arrangements that reflect the real nature of their work.”
CEO of Australia’s peak industry body representing recruitment and staffing, Charles Cameron, expressed exasperation: “This decision has shone a light on a significant anomaly that exists within the current Fair Work Act where an employee can double dip on leave entitlements and payments,” he said. “The ability of the Act to be interpreted in this fashion creates enormous uncertainty for business in Australia and highlights the huge difficulty that exists for employers in complying with unclear law.”
What these and other commentators have in common is a desire to see clarification in the definition of that ‘casual employment’ actually means.
What to do?
Legislative changes take time, and in the meanwhile, employers need to be careful of what they do when handling casual staff.
Remember the following:
- Casual employees perform work on a non-ongoing basis and usually can choose to select when to work. Importantly, casual employment ends when the engagement ends and there is no guarantee of ongoing employment. A casual loading is paid in lieu of leave entitlements.
- Employers should carefully consider rostering needs to ensure that casual employees are not used on a regular basis to perform the same hours and/or shifts.
- Casual employees who are employed on a regular and systematic basis and have a reasonable expectation of ongoing employment may be found eligible to make a claim for unfair dismissal or for unpaid entitlements such as annual leave.
Contact JFM Law on (02) 9199 8597 for a no obligation chat. If you would rather get in contact through email, send your question through or by email at wehelp@jfmlaw.com.au.
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The information contained in this post is current at the date of editing – 19 July 2023.