When is a casual not really a casual?

Cases

When is a casual not really a casual?

A Full Federal Court has ruled that a FIFO mine worker was not a casual employee, even though he was on the books as a casual and was regarded as such by management.

A Full Federal Court has ruled that a labour hire (fly in, fly out) mine worker was not a casual employee for the purposes of the Fair Work Act, even though he was treated as a casual on the books and regarded as a casual by management.

The consequence was that he was entitled to annual leave and other permanent employee entitlements. 

The essential distinguishing features that made the employee permanent were that the employee worked set hours that were inflexible and,in addition, there was a good degree of certainty about ongoing work for him.

Background


The employee worked for a labour hire company, WorkPac, that supplied labour to a Queensland mine site. He worked as a casual truck driver at the mine.

He claimed that he was in fact a permanent full-time employee of WorkPac, and, as such, he was entitled to annual leave or an equivalent payment.

Is a casual employee a worker designated as casual?


WorkPac argued that a casual employee was an employee designated as casual by the relevant industrial instrument. In this case it was the WorkPac Pty Ltd Mining (Coal) Industry Workplace Agreement 2007.

The employer submitted that under the Fair Work system it was accepted that an employee was regarded as a casual employee if described or defined as a casual employee under the applicable federal industrial instrument.

Issue


The full court had to decide whether the Fair Work legislation intended the term ‘casual employee’ to be used in its ordinary, legal/common law sense or whether the relevant instrument (eg agreement) could specify a worker as a casual. The alternative was argued by the employer – that is, employees called ‘casual’ in federal industrial instruments were casual.  

If WorkPac's argument was accepted, employers could engage employees under an award or agreement allowing for casual labour and describe them as casual: that would suffice for legal purposes and so determine their appropriate wages and conditions.

Reasoning of the full court


The full court approached the issue by first noting the interaction between modern awards, enterprise agreements and the National Employment Standards (NES).

The full court pointed out that the NES set out the minimum standards that applied to the employment of employees and these standards could not be displaced. The NES is the prime source of law over terms and conditions of employment provided by all other instruments, including enterprise agreements, modern awards, or contracts of employment.

The full court was unwilling to reverse the order of priority between the NES and awards and enterprise agreements. The consequence was that awards, agreements and contracts were not the appropriate sources to define a casual employee. The appropriate source was the common law. 

The court then specified what this common law understanding of casual was.

Leading case on ‘casual work’


The full court pointed to Hamzy v Tricon International Restaurants trading as KFC (2001) 115 FCR 78 where the essential characteristics of casual employment were noted as:
  • the absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee would work
  • no firm advance commitment from the employer to continuing the work on a commitment to an  indefinite basis or on an agreed pattern of work; and
  • irregular work patterns, uncertainty, discontinuity, intermittency of work and unpredictability.
The full court explored a wide range of case authorities in its decision. This case law can be explored by opening the full text of this case noted at the end of this digest.

Receiving casual loading and permanent benefits


The full court commented on a situation where employees might receive both paid annual leave (and other permanent benefits) and a casual loading rate, saying that if an employer decided to pay a loading (despite the legal position), that does not mean the status of employment is any different from what the law determines.

Conclusion


WorkPac’s appeal was dismissed. The worker’s appeal was allowed. The matter was remitted to the Federal Circuit Court of Australia for the re-determination, in accordance with these reasons. The worker was entitled to receive annual leave or be paid monies in lieu thereof in accordance with Div 6 of Pt 2-2 of the FW Act and cl 19.1.1 of the agreement.

The bottom line: This case will impact employers seeking to engage labour hire on a casual basis. The nature of engagements need to be monitored as the workers may be classified as permanent at law.

Simply paying workers as casual will not mean that an employer can avoid treating an employee correctly at law so a casual loading will not mean that there are no permanent entitlements.

This article on WorkplaceInfo explores the implications of this case.

Read the judgment


WorkPac Pty Ltd v Skene [2018] FCAFC 131
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