Is your casual employee actually a casual employee?

29 January 2020|case-summaries news

In the WorkPac v Skene case (WorkPac Pty Ltd v Skene [2018] FCAFC 131), the employee, employed as a casual, worked on a continuous roster arrangement and at the beginning of each year was given 12 month rosters.

The Federal Court concluded that in s 86 of the FWA (I.e. the one which says casual employees aren’t entitled to annual leave) “casual employee” had its common law meaning being an employee employed on an “irregular, intermittent, occasional or discontinuous” basis. This means that any casual employees who are engaged on a regular, systematic and ongoing basis are entitled to annual leave.

However, in response to the decision in WorkPac v Skene and the concerns it was causing employers, the Federal Government introduced the Fair Work Amendment (Casual Loading Offset) Regulations 2018. The Casual Loading Offset Regulation provides that an employer can make a claim to have the casual loading payments made to the employee taken into account when working out the entitlements owing to the employee for the relevant National Employment Standards (NES) entitlements.

This can occur where the following criteria are successfully met:

The employee is employed on a casual basis;
The employee is paid a casual loading which is ‘clearly identifiable as an amount paid to compensate the person for not having one or more relevant NES entitlements’ (for example, annual leave or personal leave);
Despite being classified by the employer as a casual, the employee was in reality a full-time or part-time employee for some or all of their employment for the purposes of the NES;
The person makes a claim to be paid for one or more of the relevant NES entitlements that they didn’t receive for all or some of the time they were incorrectly classified as a casual.
This regulation came into effect on 18 December 2018. However, it applies to all employment periods including those that occurred wholly or partly before that date.

It was widely expected that WorkPac would appeal that decision to the High Court but they did not. Instead, they initiated a new case – WorkPac v Rossato. The Federal Government has intervened in this case (meaning that they will have a right to be heard) as it is hoped that this decision will either overturn or further clarify the decision in Skene and what that means for casuals.

In the meantime however, for employers to reduce the risk of claims by casuals for annual leave and other entitlements, employers should ensure written confirmation of casual status but without offering or committing to ongoing or regular work. The confirmation should also specify the casual loading paid and why the loading is paid (i.e. in lieu of annual leave, personal leave, notice of termination and other entitlements for full time and part time employees).