Not So Casual
August 2018 | News | Peter Wilson
Last week a Full Court of the Federal Court of Australia held that a truck driver employed by a labour hire company to work at a Queensland coal mine was entitled to paid annual leave despite the fact he had an employment letter stating he was engaged as a casual employee.
This is not the first time courts have delivered surprising results related to “so called” casual employees.
However, some key facts may put this in perspective:
- The Fair Work Act annual leave provisions state that they do not apply to ‘casual employees’ but do not define what a casual employee is;
- The truck driver had been engaged continuously on a “fly in – fly out” roster (the same as ongoing employees) for four years and the employer gave him his rostered shifts for the year ahead. So the employer was held to be expecting the employee to be available for future work on those rostered shifts;
- The labour hire company promised the employee he would be made permanent after a three-month probation period, and paid him for a period when he was stood down for an investigation; and
- The employee was paid a flat hourly rate that did not specify a particular casual loading.
The employer may ask the High Court to allow an appeal from this decision. Many employers will certainly lobby the Federal Government to amend the Fair Work Act to stop an employee receiving paid annual leave as well as a 25% casual loading that has been calculated to include payment in lieu of annual leave and other permanent employee entitlements.
There now is a significant disconnect between awards that state a casual is an ‘employee engaged and paid as such’ (i.e. a letter of offer says the role is casual and a casual loading is paid) and this Full Bench Federal Court decision, which interprets the term “casual employee” in the paid leave provisions of the National Employment Standards in a different manner.
In the interim, employers should review any situations where they are engaging employees as casuals on a regular and systematic basis as there is a risk that such employees may be entitled to paid annual leave (and paid personal/carers/compassionate leave) in addition to casual loading.
Employers should also note that many modern awards are being varied to include clauses that enable casual employees to elect to convert to ongoing part-time or full time employment. Finally, long term casuals remain entitled to make unfair dismissal claims.
As the cost of engaging casual employees rises employers should re-evaluate the cost/benefit of moving employees to part-time/ full-time/ or term employment.
This case (along with the Fair Work Commission decision late last year to allow certain fixed term employees to make unfair dismissal claims when their employment comes to an end at the end of their contract period) is another example of pragmatic, predictable rules being upended and replaced with an unfortunately vague test: e.g. “ whether any particular employee is a casual employee depends on an objective characterisation of the nature of the particular employment as a matter of fact and law having regard to all the circumstances” (paragraph 159 WorkPac Pty Ltd v Shene 2018 FCAFC 131).
Protective measures employers can take include ensuring your employment contracts are clearly drafted, are compatible with any relevant award/enterprise agreement, and that you know the potential risks in certain types of engagement.
If you want advice on this, or any other employment issues, please contact Peter Wilson (pwilson@prolegis.com.au) at Prolegis Lawyers.