When is a casual actually a permanent employee?

In a recent decision, the Full Federal Court found that an employee who was described by his employer as a ‘casual’ was actually a permanent employee, meaning that he was entitled to payment for his untaken annual leave. We explore both the case and the intricacies of casual employment. 

Casual vs permanent employment

Whether you are a ‘casual’ or a ‘permanent’ employee is important because of the impact on your entitlements.

Casual employees receive a loading on their base rate of pay (typically 25%) in place of various benefits, including leave entitlements and processes around termination. Permanent employees don’t receive this loading, but are instead entitled to benefits such as paid annual leave and sick leave.

Defining casual employment

The Fair Work Act is one of the main laws which govern employment relationships, but it does not define ‘casual employment’.

In their recent decision (WorkPac v Skene), the Court outlined a number of factors which help to determine whether someone's employment is casual or not. These included:

  • whether work patterns are regular
  • whether employment is continuous, and
  • whether work is certain and predictable

That said, a Court will consider the employment relationship as a whole in assessing whether employment is truly casual or not.

What happened in WorkPac v Skene

Mr Skene was employed for almost two years on a ‘fly in, fly out’ basis as a dump-truck operator at a Central Queensland mine.

When he started with Workpac, Mr Skene was given an offer for casual employment for a 3 month assignment. WorkPac's workplace agreement also categorised him as a casual employee.

During his employment:

  • He worked 7 days on/7 days off on a continuous roster
  • The roster was set 12 months in advance
  • He could be certain that he would regularly work 12.5 hours every shift, as reflected in his pay slips
  • The work was continuous
  • He always worked with the same crew, alongside labour hire workers and permanent employees
  • His flights and accommodation were paid for by the mine
  • He was expected to be available to the mine on an ongoing basis, and
  • His work did not vary

Based on the factors used to determine casual employment, the Court found that Mr Skene was not a ‘casual’ employee because the true nature of his employment was ongoing and permanent. The Court found that in order to be a true ‘casual’ employee, there should not be any firm advance commitment to continuing and indefinite work. What is critical is flexibility in the employment relationship once someone is hired.

In Mr Skene's case, his work was regular, predictable and continuous. Therefore, the description of Mr Skene as a casual in his contract, and the payment of casual loading, were not relevant in this case.

The Court found that Mr Skene was entitled to receive annual leave under the National Employment Standards (NES), or compensation in lieu of that leave entitlement. WorkPac was also liable to pay penalties.

What to look out for

An employee who starts as a causal may not always be a casual employee, because employment relationships may transform over time. If you aren’t sure whether or not you are really a casual employee, you should seek legal advice or talk to your Union. Things to look out for include:

  • You have generally been engaged on an ongoing basis and your employer is seeking to change this to a short-term basis
  • You are rostered on for lengthy periods in advance of each shift and your employer is seeking to change your roster arrangement
  • Your employment as a casual worker has been regular, predicable and continuous and your employer is now seeking to alter this to make your work patterns irregular and unpredictable.

Judgement

You can read more about the case by clicking on the below link:

WorkPac Pty Limited v Skene [2018] FCAFC 131 (WorkPac v Skene)

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Naomi Hickey-Humble

Maurice Blackburn Melbourne
Naomi Hickey-Humble is an employment and industrial lawyer, practising in Maurice Blackburn’s Melbourne office. She is a member of the only first tier law practice listed by the prestigious Doyles Guide 2018 for employee representation. With a range of experience, Naomi advises on all ...

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