‘Casual Employees’ are not always ‘Casually Employed’

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The recent decision of the Full Court of the Federal Court of Australia in WorkPac Pty Ltd v Skene [2018] FCAFC 131 has confirmed employees purportedly engaged on a casual basis are not necessarily casual employees, and could be owed entitlements.

Background

Mr Skene was employed by WorkPac Pty Ltd, a labour hire company, to work fly-in-fly-out as a dump truck driver on a Rio Tinto mine. Mr Skene worked 7 days on 7 days off, and was informed of his shifts by a roster 12 months in advance. Mr Skene was paid a flat rate per hour and was described in his contract of employment as a casual employee.

Section 86 of the Fair Work Act (FW Act) provides an entitlement of annual leave to all employees, other than casual employees. [1] Mr Skene maintained he was not a casual employee and as such was entitled to unpaid annual leave he had accrued during his employment with WorkPac.

Decision

The Court held the term casual employment, for the purposes of section 86 and the wider FW Act, was to be given its common law meaning, that being ‘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’. [2] The Court outlined some indicia of how this definition usually manifests in practice:

  1. Irregular work patterns;
  2. Uncertainty as to the period of employment;
  3. Discontinuity;
  4. Intermittency of work; and
  5. Unpredictability as to the availability of future work.

The Court also examined the payment of casual loading and concluded although the payment of casual loading is a relevant factor in determining whether or not an employee is employed on a casual basis, it is not determinative as an employer is entitled to pay an employee extra remuneration should they so choose.

The Court found in favour of Mr Skene, ruling he was not a casual employee for the purpose of section 86. In doing so the Court also cautioned against employees ‘double dipping’ whereby they claim the casual loading in addition to employment entitlements. The Court held, if an employee wrongly characterises an employee as casual, should that employee later claim their entitlements, the employer is able to offset any amount already paid in casual loading against any entitlements owed. Unfortunately, WorkPac was unable to offset any casual loading they might have paid Mr Skene, as no designated portion of his wage was attributed to casual loading.

A class action targeting the biggest labour hire firms is now expected to be filed in the Federal Court within the next month.

Key Takeaway

Employers should consider the following when engaging employees on a casual basis:

  1. Specifying the amount of casual loading included in a casual employees’ wage in their contract of employment; and
  2. Reviewing their casual employees work arrangements, specifically how far in advance employees are given rosters or informed of work commitments to ensure they are not treated as permanent staff.

Please get in touch if you require further clarification.


[1] Fair Work Act 2009 (Cth) s86

[2] Hamzy v Tricon International Restaurants trading as KFC (2001) 115 FCR 78

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