In the case of WorkPac Pty Ltd  FCAFC 131, the Full Court of the Federal Court upheld a decision that an employee engaged as a casual worker and described as such but working a regular roster is a permanent employee. Accordingly the worker is entitled to annual leave under the Fair Work Act 2009 (Cth) and under the enterprise agreement. Just because an employee is described as a casual worker does not mean the employee will necessarily be a casual worker.
In this case, the employee Mr Skene was employed by labour hire company, WorkPac Pty Ltd, which supplied labour to various mining companies. In early April 2010, Skene responded to an advertisement by WorkPac Pty Ltd for a fly in fly out dump truck operator at the Clermont Mine, Queensland. Skene was subsequently successful in his application for work and in mid-April 2010 received from the labour hire company a “Notice of Offer of Casual Employment”. He executed a document entitled, “Casual or Fixed-Term Employee Terms and Conditions of Employment”. The contract provided that Skene be employed on a casual basis and paid an hourly rate of $50 per hour. His contract could be terminated at one hours’ notice. During the time that Skene was employed at the Clermont Mine, he worked a pattern of 7 shifts of 12.5 hours each, followed by 7 days off, specifically 7 days on and 7 days off. The roster was determined 12 months in advance. In April 2012, Skene’s employment was terminated. Upon termination, Skene claimed annual leave entitlements on the basis that he was not a casual employee but rather an employee working on a continuous permanent basis.
Discussion by Full Court
The Full Court examined the meaning of casual employee. As there is no definition of casual employee in the Fair Work Act 2009 (Cth), the court considered whether there could be meaning at common law or in modern awards and enterprise agreements. The court was not persuaded that there was a uniformly understood specialized meaning of “casual employee” in the Award context. The court focused on casual employment at common law and referred to the indicia of casual employment in the authorities as the following:
- irregular work patterns;
- uncertainty as to the period over which employment is offered;
- discontinuity; and
- intermittency of work and unpredictability.
Casual employment involves flexibility in the employment relationship following engagement. The description of casual employee in the contract, payment of casual loading, submission of timesheets and right to terminate on an hour’s notice are relevant but determinative. The Court commented that these factors often reflect the parties’ subjective intention at the commencement of the employment, but may not reflect the objective reality of that employment over time. The court examined the real substance, practical reality and true nature of the relationship between the employer and employee. Accordingly if the employment relationship has a level of certainty, regularity and predictability about the hours worked then it is inconsistent with a casual relationship.
Accordingly the court found that Skene a labour-hire employee engaged to work as a casual employee but working a regular roster of 7 days on and 7 days off with a 12 months roster in advance was not a casual employee under the Fair Work Act 2009 and was not considered a casual employee under the relevant enterprise agreement being WorkPac Pty Ltd Mining (Coal) Industry Workplace Agreement 2007.
Also, the court found that an employment which commences as casual employment may become full-time or part-time because its characteristics have come to reflect those of an ongoing part-time or full-time employment.
The Court discussed the concept of ‘double dipping’ by casual employees who reap the benefit of a casual loading and also annual leave entitlements. The Court commented that, as permanent employees are not entitled to casual loading, there will be no ‘double dipping’.
Importantly, the Court noted that an employer may be able to claim a set-off against an employee who is paid a casual loading and later successfully argues that he or she is entitled to annual leave on the basis that he or she is not a casual.
On the facts of the WorkPac Pty Ltd case however, WorkpPac’s claim to set off the casual loading against Mr Skene’s entitlement to annual leave was unsuccessful. There was no stated amount or percentage of his wages expressly attributed to the casual loading. Instead, the pay rate was stated in general terms.
Penalties against the Employer
In regard to the issue of penalties, the Court commented that the employee whom WorkPac Pty Ltd claimed had provided advice about the nature of Mr Skene’s engagement had commenced employment after Mr Skene had. The Court also highlighted the objective seriousness of the offence and that ignorance of the law by the employer is not ordinarily an excuse. The Court referred the decision of compensation payable to Mr Skene, and penalties to be imposed on WorkPac Pty Ltd, back to the primary judge.
The Impact of the Decision
The Full Court’s decision in WorkPac Pty Ltd v Skene , has important consequences for Employers. Employers should consider the following:
- If it is arguable that a casual employee could be determined as a permanent full-time or part-time employee, then the employer will have to pay at the very least annual leave, sick leave, parental leave, compassionate leave, redundancy pay and public holidays.
- Examine how their casual employees are engaged including the systems of work and work practices. It should be queried how far in advance is there a stated commitment to work agreed days or hours? Even if employees are rostered, can it be said that the engagements beyond the roster period are not fixed and are variable? In working this out, employers should focus on the key features of casual employment including irregular work patterns, unpredictability and intermittency.
- Offer full-time or part-time employment and/or change the work arrangements where practical.
- Review contracts to ensure that casual loadings are clearly identified in monetary terms so that casual loadings may be able to be set off against annual leave entitlements if a claim is made.
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