A few things in life are certain. The sky is blue, puppies are adorable, and casual employees don't get redundancy pay. Maybe you weren't fully across that last one but, in our world, it's a given. Until now.
In a recent (and, in our view, wrong) decision, the majority of the Full Bench of the Fair Work Commission decided that, when calculating redundancy pay, employers must recognise employees' regular and systematic casual employment.
The Fair Work Act excludes casual employees from redundancy pay. Nothing in the Full Bench's decision changes that. However, in this case, the employees in question transitioned from casual to permanent employment. Therefore, when redundancies were rolled out, they had an entitlement to redundancy pay. In calculating redundancy pay, their employer naturally took the casual exclusion to mean casual service doesn't count. Makes sense, except to the majority of the Full Bench.
The Full Bench majority brushed aside the casual exclusion in the redundancy provisions and instead focused on the definition of "service" under the Act. They noted that regular and systematic casual employment is not expressly excluded from the definition of service (which doesn't exclude any form of casual employment) and, as a result, held that the employees' casual service must be recognised for the purpose of redundancy pay.
We obviously don't agree. We think it's clear that the casual exclusion to redundancy pay means casual service shouldn't be recognised.
The decision becomes more absurd when you consider that casual employees are paid a loading in lieu of forgone entitlements such as annual leave, personal leave and redundancy pay! The decision allows doubledipping. Casuals, who transition to permanent employment, get their loading and redundancy pay. In a strong dissenting decision, Commissioner Cambridge also warned that the majority's decision could result in claims for annual leave and personal leave by casuals who transition to permanent employment as those entitlements rely on the same definition of "service".
Employer groups are already furious about the decision, so we don't think this is the last we'll hear about it. We'll have to wait and see whether that's through judicial review of the decision in the Federal Court, or lobbying for changes to the Act. But, until then, casual service counts.