Casual Employees Deemed Full Time

A Time to Review Casual Engagements

In a recent Federal Court decision that may have major implications for Companies in the construction industry, especially Labour Hire Companies, the definition of a casual employee has been called into question. The Full Federal Court of Australia in WorkPac Pty Ltd v Skene [2018] FCAFC 131 (16 August 2018) found that a casual employee engaged under an enterprise agreement was not in fact a casual employee by reason of the continuous, regular and predictable nature of the employee’s pattern of work.

Paul Skene was engaged by WorkPac as a causal fly-in, fly-out dump-truck operator on mining operations between April 2010 and April 2014. The features of this work were as follows:

• Mr Skene worked in accordance with a regular, 7 days on 7 days off continuous roster arrangement;

• Between January 2011 and January 2013, Mr Skene’s rosters, commencing January, were provided 12 months in advance;

• Flights and accommodation were booked and provided by the Employer for Mr Skene. Mr Skene was also assigned a permanent single room at the camp accommodation for the period of his roster.

As ‘casual employee’ is not defined by the Fair Work Act 2009 (Cth), the phrase was open to interpretation by the Court. The Court found that what distinguishes ‘full-time’ and ‘part-time’ from ‘casual’ employment was the commitment by the employer to provide the employee with “continuous and indefinite employment according to an agreed pattern of ordinary time work.” The Court stated:

“In contrast, a casual employee has no firm advance commitment from the employer to continuing and indefinite work according to an agreed pattern of work.”

Pursuant to the features of his employment, Mr Skene was found to have firm and advance commitment from the employer to his ongoing employment.

The primary judge awarded Mr Skene compensation and interest for accrued annual leave entitlements during the period of engagement as a ‘permanent casual’ to be paid by WorkPac. WorkPac will also be penalised for contravening a provision of the National Employment Standards. The precise penalty and relief of the recent appeal decision has not yet been handed down.

A casual loading (e.g. 25%) specified in the contract of employment will indicate the intention of casual employment. However, the objective assessment of the arrangement will need to consider whether that intent has been put into practice and maintained. The existence of a firm advance commitment to continuing and indefinite work according to an agreed pattern of work will ordinarily demonstrate a contrary intent. Key indicators of an objective casual arrangement will be irregularity, uncertainty, unpredictability, intermittency and discontinuity in the pattern of work of the employee. The decision leaves open the prospect of offsetting any accrued entitlements in such a finding through the payment of the specified loading.

This is a concerning precedent in that any casual employment arrangement, other than temporary or project/seasonal employment, that exceeds 12 months and is ongoing and regular will be vulnerable to an application to determine a permanent status. Such a finding can be irrespective of the parties initial agreement, the Court stating that a relationship may change over time.

The exposure to these actions may be mitigated through a range of measures including:

1. Including a definition of casual employment in enterprise agreements;

2. Specifying in contracts of employment the nature of engagement and the actual casual loading paid;

3. Considering the use of casual conversion measures in Modern Awards/Enterprise Agreements; and

4. Adopting annual reviews of arrangements.

If you require any assistance, please contact Drayton’s on (07) 3831 7099.