The fatal attraction of a ‘casual fling’ and when it all goes wrong
Posted on September 21, 2018
In a recent decision of WorkPac Pty Ltd v Skene [2018] FCAFC 131 the Full Court of the Federal Court has found that a casual employee, who was engaged and paid as a casual, was entitled to annual leave because he worked regular and predictable hours.
This matter highlights the importance for employers to review all casual employment arrangements and assess if employees ought to be engaged on a permanent or part time basis.
Mr Skene was employed as a casual “fly in, fly out” dump truck operator, by WorkPac Pty Ltd.
The general nature of Mr Skene’s employment was as follows:
- 7 days on, 7 days off on a continuous roster
- Certain, regular and predictable working patterns which were set 12 months in advance
- Continuous work (except for 7 days of unpaid, prearranged leave)
- Flights and accommodation fully paid for
- Expectation of availability of Mr Skene, on an ongoing basis
- No fluctuating work conditions
- Flat rate of pay, which was not inclusive of casual loading and not set off against any minimum entitlements payable under the NES or the workplace agreement
- No paid annual leave
When Mr Skene’s employment came to an end, he lodged an Application with Federal Circuit Court for compensation for unpaid annual leave under the National Employment Standards (NES) and under the Enterprise Agreement that applied to him.
As casual employees are not defined in the Act, the Court was left to determine if Mr Skene was a casual employee at common law.
At first instance the Court held that Mr Skene was not a casual employee (and therefore a permanent employee) for the purposes of the NES because his employment was:
- Subject to set clear hours of work;
- predictable;
- based on a roster set 12 months in advance.
However, the Court also held that he was a casual employee within the meaning of the Agreement as the Agreement allowed the employer to classify Mr Skene as a casual employee at the commencement of his employment.
As a result, Mr Skene was only entitled to compensation for unpaid annual leave under the NES, and was not awarded penalties against WorkPac.
Both parties appealed the decision.
The Appeal
On Appeal, the Full Federal Court examined concept of ‘casual employment’ in greater detail to establish a clear test at common law.
The Court summarised casual employment as being “… the absence of a firm advance commitment as to the duration of the employment to the days or hours the employee will work”. The lack of a firm commitment is mutual, with employees similarly not providing a commitment to ongoing employment to their employer.
The Court held that casual employment is characterised by the following:
- Irregular work patterns
- Uncertainty as to the period over which employment is offered
- Discontinuity
- Intermittency of work and unpredictability
- Flexibility
The Court found that there was evidence that WorkPac expected that Mr Skene would be available on an ongoing basis to perform his duties in accordance with the roster which was predetermined 12 months in advance.
Ultimately, it was found that Mr Skene was not a casual employee under the Agreement or the common law definition (as defined above). As a result, Mr Skene was found to be a permanent employee and therefore entitled to annual leave under both the NES and the Agreement.
Other Points to Consider
Many employees elect to work as a casual employee and therefore forego annual leave entitlements to obtain casual loading. Even when this is mutually agreed between the parties, the employer is not necessarily safe from a claim. The payment for casual leave loading does not affect the common law test to determine a ‘casual employee’. The WorkPac decision in effect permits employees to “double dip” on entitlements - accepting the casual loading and the entitlement to annual leave.
The Court did indicate that an employer may ‘set off’ the liability for annual leave or other benefits against the casual loading in circumstances where the loading is clearly expressed as a set amount. Employers intending to rely on this method should obtain expert advice as to how to adequately achieve this.
Conclusion
The absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work, is the essence of casualness and distinguishes it from either full-time or part-time employment. The payment of a casual loading is not a decisive factor of casual employment.
Employers may be exposed to claims for annual leave and other accrued entitlements for casual employees engaged on a regular basis, even when the casual employees are engaged under terms of an enterprise agreement or modern award and the employee is paid casual leave loading. Ignorance to the law is not a defence.
In light of this decision, we recommend that employers review all casual employee arrangements. If you need assistance with your casual employee arrangements, please contact our workplace relations team.
