The employment law landscape continues to change with a number of significant decisions in recent months.

WorkPac Pty Ltd v Skene [2018] FCAFC 131 made news Australia-wide. In WorkPac it was held that an employee purportedly engaged as a casual, was not a casual employee for the purposes of the Fair Work Act 2009 (Cth). Consequently, he was entitled to annual leave. As it currently stands, this decision may have significant implications for some employers.

An important decision has also been handed down regarding capacity-related dismissals.  In CSL Limited v Chris Papaioannou [2018] FWCFB 1005 the Full Bench of the Fair Work Commission considered the correct approach to be taken in capacity-based dismissals. In doing so, the Full Bench rejected an earlier Full Bench authority as “plainly wrong”.

Below we look at the Workpac decision. A review of CSL Limited will be provided in a later edition.

When is a casual employee not a casual employee?

In WorkPac, the Full Court of the Federal Court considered the meaning of ‘casual employee’ for the purposes of the Fair Work Act 2009 (Cth).

WorkPac operated a labour-hire business. It engaged Mr Skene as a truck driver at a coal mine. He worked 12.5-hour shifts on a 7-days-on, 7-days-off roster. Importantly, Mr Skene was given rosters 6 and 12 months in advance.

Several factors suggested that Mr Skene was a casual employee. He was given a “Notice of Offer of Casual Employment”. His contract said that he was a casual and that he would be paid a “flat rate of $50.00 per hour”. Furthermore, his employment could be terminated upon one hour’s notice.

Mr Skene claimed that he was a permanent full-time employee and therefore entitled to payment in lieu of untaken annual leave.  At first instance, the Federal Circuit Court found Mr Skene was a casual for the purposes of the Fair Work Act 2009 (Cth).

Both parties appealed to the Full Court of the Federal Court. The key question was whether Mr Skene was casual employee within the meaning of s86 of the Fair Work Act 2009 (Cth) (which deals with employees’ entitlements to annual leave), and what approach courts and tribunals should take to determine whether an employee is casual.

The Full Court held that whether an employee is casual is a question of substance, not form. An employee is casual if there is no firm mutual “advance commitment” to work. “Irregular work patterns, uncertainty, discontinuity, intermittency of work and unpredictability” are the usual manifestations of the absence of an advance commitment.

In determining whether the employee is casual, a court will weigh up various indicia. This is similar to the approach taken by courts when determining whether a worker is an employee or independent contractor.

The fact an employee is paid a casual loading indicates that an employee is casual. However, the Full Court held that payment of a casual loading is not, of itself, determinative.

The Full Court upheld the decision of the primary judge. The Full Court found that Mr Skene was not a casual employee for the purposes of the Fair Work Act 2009 (Cth). He was therefore entitled to annual leave.

Following this decision, employers should be wary of treating employees as ‘casual’ where they have inflexible fixed hours, and there is certainty regarding their engagement.

Employers who engage a high number of casual employees to work regular hours should consider seeking legal advice.

Adam Colquhoun

Principal, WestmoreJacobs

This article is general information only. It is not legal advice. If you need legal advice, please contact us.