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PH SOLICITOR NEWSLETTER - OCTOBER 2018

  • 13/10/2018 11:54:00 AM
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PH SOLICITOR NEWSLETTER - OCTOBER 2018

Casual employees - really just a casual?

It has long been considered by employers that casual employees do not have the same entitlements as permanent employees. However, a recent decision handed down by the Full Court of the Federal Court of Australia (Court) will have a widespread effect on how casual employment is classified.

The way that a casual employee is rostered and allocated shifts can now be used to demonstrate that they are not a true casual employee. In this article, we look at a recent decision handed down by the Court.

WorkPac Pty Limited v Skene

In August 2018, Court handed down a decision in WorkPac Pty Limited v Skene [2018] FCAFC 131 (Skene). The impact of this decision, particularly on the labour-hire industry is widespread in regards to the entitlements that a regular casual employee may be entitled to receive, despite any casual loading that may have been paid.

Facts

Mr Skene had been employed by Workpac Pty Ltd since April 2010 as a dump-truck operator. From July 2010 to April 2012, he was working 12 hour shifts on a rotating roster of seven days on and seven days off at the Clermont Mine in Central Queensland.

Throughout his employment, he was engaged, as per his contract of employment, as a casual employee.

He was paid a flat rate of pay under the terms of the Workpac Enterprise Agreement (Enterprise Agreement). Mr Skene was rostered on the same shifts, and his roster was provided 12 months in advance. During his employment, Mr Skene was not paid annual leave due to his classification as a casual employee under the Enterprise Agreement. Upon adoption of the casual conversion clause into modern awards, an employer will be required to provide casual employees with a copy of the clause within 12 months of employment.

Upon termination of his employment, Mr Skene did not receive any payment in lieu of unused annual leave which he believed he was entitled based on his employment. He subsequently filed an application to recover monies in payment of unused and accrued annual leave. Mr Skene argued that he was a permanent employee on the basis of his employment arrangement with Workpac and as such, he should be paid for annual leave accrued and not taken, during his employment.

Decision

The Court considered the circumstances in which Mr Skene was employed by Workpac and the nature of the employment relationship.  Despite the fact that Mr Skene was paid a casual loading, the Court had to determine what factors define the type of employment

The Court referred to the decision in Hamzy v Tricon International Restaurants [2001] 115 FCR 78, where the definition of casual employment was considered. In that decision, and the position that the Court took in Skene was that “the essence of casual employment is 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, but that is not inconsistent with the possibility of the employee’s work pattern turning out to be regular and systematic”.

The Court held that the payment of a casual loading was not a determinative factor as to whether an employee is classified as a casual. Further, the Court noted that the casual loading, at the very least, had to be identifiable. The Court then set out a number of factors to be considered in classifying an employee as a casual including:

  • The hours of work and work pattern;
  • Provision of a regular roster;
  • Fluctuation in the work pattern; and
  • Term of employment – whether fixed-term or contractor.

The Court determined that Mr Skene was entitled to annual leave upon the termination of his employment and made orders to that effect.

National Employment Standards

The National Employment Standards (NES) are 10 minimum statutory employment entitlements provided for in the Fair Work Act. The conditions set out in the 10 NES are the minimum standards that all national system employees are entitled to in their employment.

The Court in Skene addressed the statutory entitlements of national system employees in determining the employment status of Mr Skene. The Court maintained the position that if an employee meets the criteria and definition of a permanent employee, yet the employer pays them above the applicable Award or Agreement rate in the form of a loading, does not mean that the employee is a casual.

Future of casual employees
 
It is important for employers to understand the classification of employment to ensure that employees are accurately classified.
 
Correct classification of the employment status of casual, part-time, full-time employees, or contractors will ensure that the correct statutory entitlements are paid to employees.
 
In light of the decision handed down in Skene and the nature of the employment relationship in the modern day, it is important for employers to be aware of the way in which they employ casuals. If an employee is classified as a casual and paid an amount above the applicable minimum wage, it is important for employers to be able to clearly demonstrate the loading, as well as the considerations outlined above if they are to rely on this as a factor in classifying the employee as a casual.
 

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