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Recent Court decision Regarding Casual Employment

By 31 July 2020Employment
McNamara Law

In 2018 there was a decision from the Federal Court of Australia (WorkPac Pty Ltd v Skene [2018] FCAFC 131), that a fly in, fly out worker was not a casual employee for the purposes of the Fair Work Act. On this basis, such a worker was entitled to annual leave. The impact of this decision flowed on to other fields of employment.

Then, in 2019, there came along a new decision of the Federal Court (Birner v Aircraft Turnaround Engineering Pty Ltd [2019] FCA 1085) that threw into question the nature of a casual worker established in Skene. In this new case, the Court found that an employee, despite working 40 hours most weeks under a casual employment contract, and demonstrating similar characteristics to Skene, was a genuine casual employee and not permanent.

Such is the ever changing landscape in the legal battlefield, recently another case came before the Federal Court (Workpac Pty Ltd v Rossato [2020] FCAFC 84) which has thrown the nature of casual employment into chaos again.

Here, Mr Rossato was casual, and made a claim for personal/carer’s leave and compassionate leave. Workpac refused, on the basis that they were paying leave loading (although the records did not clearly show leave loading was paid, but Workpac instead paid a higher hourly rate). In the alternative, Workpac argued if they have to pay those entitlements (like they did in Skene) then the leave loading should be set off against the other entitlements.

The Federal Court went back to the Skene decision, and decided that Mr Rossato was more than a casual employee, and therefore able to claim those entitlements. The Court also found that Workpac was not able to set off leave loading against the entitlements, because the employment contract, paying the higher hourly rate, did not make it clear that leave loading was being paid.

The test established in these decisions, to determine if a worker is casual, is whether:-

  • Their employment is informal and unlikely to continue for any length of time;
  • Their employment is not regular and stable;
  • The employer can decide whether to offer employment on a particular day, or not;
  • When employment was offered, the employee can decide whether or not to work;
  • They only worked on demand or as required over a short period; and
  • They are employed ‘by the hour’ and may be terminated on very short notice.

In Rossato, the Court noted that it was in fact very difficult for Mr Rossato to decline shifts, as he would then be exposed to disciplinary action if he did. Otherwise, his hours were as regular and predictable as the other full-time employees working on the same rosters, and were no less regular and predictable than any permanent full-time employee.

The Rossato decision does not mean that every casual can claim leave and other entitlements, even where their employment meets the test. As a general rule, those casual employees are entitled to be paid leave loading to compensate for not having those entitlements.

We expect Workpac may appeal this decision, or perhaps there will be some amendment to the Fair Work legislation to address the issue. Until legal clarity occurs, we recommend that employers consider:

  1. Reviewing casual work contracts, and work patterns, to identify if there is any suggestion of permanent employment. An employer might consider converting such employees to a permanent employment arrangement.
  2. Review employment contracts and ensure that contracts have effective off-set clauses for leave loading against other entitlements under the National Employment Standards.
  3. Review employment contracts and payslips to ensure casual loading amounts are clear, and separate from the hourly rate.
  4. Ensure casual contracts reflect the casual employment characteristics such as:-
    1.  the period/length of service;
    2. the number of hours per week;
    3. their hourly rate – inclusive of a casual loading percentage;
    4. patterns of engagement – there is no guarantee of ongoing employment;
    5. predictability of rosters;
    6. any expectation of ongoing work;
    7. an employee’s ability to reject shifts;
    8. the extent of any reliance on casual employees – to reflect the ad hoc relationship.

For more information about employment law please contact one of our Ipswich lawyers on 13 58 28.