In a recent decision allowing a dismissed employee’s appeal, the Full Bench of the Federal Court has upheld that an employee engaged and described as a casual worker, but working a regular roster, was a permanent employee. As a result of being a permanent employee, the worker was found to be entitled to paid annual leave under the Fair Work Act 2009.
In Workpac Pty Ltd v Skene (2018) FCAFC 131 (delivered 16 August 2018), a casual worker was found to be a permanent worker entitled to leave payments.
Mr Skene was employed as a FIFO dump truck operator by a labour hire company, Workpac Pty Ltd. He provided services to various mining companies as directed by Workpac.
In mid-April 2010, Mr Skene responded to an advertisement by Workpac Pty Ltd at a mine in Queensland. Following a successful interview, he received a “Notice of Offer of Casual Employment” and executed a document called “Casual or Fixed Term Employee Terms and Conditions of Employment”. These documents confirmed that the worker was to be employed on a casual basis, paid an hourly rate of $50.00 and his employment could be terminated at one hour’s notice. These terms are clear indicators of a casual employment relationship.
When Mr Skene’s employment came to an end in April 2012, he sought to claim annual leave entitlements on the basis that he was a permanent employee. The Court found he was a permanent employee and entitled to paid annual leave.
The Court noted that Mr Skene had certainty, regularity, and predictability regarding the hours that he worked (these were on a 7 day on, 7 day off roster created 12 months in advance).
The Court noted that the relationship lacked factors that were associated with casual employment, being:
- Uncertainty as to the period over which employment is offered;
- Irregular work patterns;
- Intermittent work;
- Unpredictability in the employment relationship; and
- Flexibility in the employment relationship.
In response to arguments by Workpac, the Court agreed that employers could set-off the amounts owed for permanent employment entitlements against casual loading. However, it did not allow Workpac to claim a set-off in this instance as it was unclear what amount was paid to Mr Skene as casual loading separate from ordinary wages.
This decision will affect regular casual workers and their employers Australia wide.
The implications of this case are that casual workers could bring claims for entitlements usually associated with permanent workers including claims for annual leave, sick (personal) leave, paid compassionate leave, and redundancy pay.
What to do in light of this
Employers should note the following:
- An employment relationship can change over time. It could prove difficult to argue that an employee remains a casual when other indicators point to them being a permanent employee.
- The Court recognises that employees are not entitled to be compensated for both permanent allowances (eg; paid leave) and casual allowances (eg; loading). A right of set off is available but will only be applied where the set-off amount can be readily ascertained.
- Employers should have a separate section on its payslips identifying amounts paid to employees as a casual loading. This figure should be a dollar value.
This Alert is intended as an alert only. It does not purport to be comprehensive advice. Readers should seek professional advice before acting in relation to these matters.