In a decision that is likely to be welcomed by employers, the Full Bench of the Fair Work Commission has refused redundancy pay to workers who were engaged and paid as ‘casuals’.

Telum Civil (Qld) Pty Ltd v CFMEU [2013] FWCFB 2434

Telum Civil (Qld) Pty Ltd operated a construction business, and employed a number of casual workers to complete the “Origin Alliance Project” upgrading the Ipswich Motorway in Queensland. Once the project was completed, the casual workers’ employment was terminated.

Under the relevant enterprise agreement which applied to the casual workers (made under predecessor legislation), “casual” employment was defined as those engaged as a casual, and paid a casual loading of 25% and accordingly, excluded such employees from the benefit of redundancy entitlements.

The Commission’s original decision

On behalf of the workers, the Construction, Forestry, Mining and Energy Union (CFMEU) applied to the Fair Work Commission pursuant to the dispute settlement procedure contained in the enterprise agreement. The CFMEU alleged that the employees were entitled to redundancy pay entitlements, and were not excluded from redundancy pay under the Fair Work Act 2009 (which provides that “casual” employees are not entitled to redundancy pay).

At first instance, Commissioner Booth accepted as uncontested that the workers:

  • ‡‡ were engaged on full time equivalent hours
  • ‡‡ worked regular hours, which were not subject to variation
  • ‡‡ had consistent and regular start and finishing times
  • ‡‡ attended work without a specific direction to do so, because the workers were expected to attend.

On these facts, Commissioner Booth did not characterise the workers as ‘casual’, and held that they were not excluded from redundancy pay entitlements under the Act. The Commissioner’s conclusions were based on a general (common law) interpretation of the term casual (that is, a worker engaged on an intermittent or irregular basis).

The Appeal

Unhappy with Commissioner Booth’s decision, Telum appealed to the Full Bench of the Commission, which found in Telum’s favour and dismissed the CFMEU’s case.

Rather than define casual employment by reference to the general (common law) interpretation, the Full Bench explained that there is no rule of construction which requires an undefined term to be given its ‘general law’ meaning, and considered that the reference to casual employees (in so far as it related to the exclusion to redundancy pay) must be “construed in the context of the Fair Work Act as a whole”.

Importantly, having considered that the Act uses terms such as “long term casual employee” and also envisages that a casual employee can be engaged on a “regular and systematic basis”, the Full Bench concluded that references to casual employees in the Act were clearly “at odds” with the general common law definition of a casual worker.

Usefully, the Full Bench explained that when construing the definition of a ‘casual’ for the purposes of redundancy pay (and for any other purpose under the National Employment Standards), reference should be had to any applicable enterprise agreement, or if there is none, the applicable modern award.

The Full Bench went on to consider the Federal Court’s decision in Williams v McMahon Mining Services Pty Ltd [2010] FCA 1321, a summary of which is contained in the January 2011 edition of Employment Matters, explaining that the decision was decided in a different statutory context (that is, the Workplace Relations Act) and was not relevant to the construction of the Fair Work Act.

Lessons for Employers

Whilst on its face there seems to be some conflict between this decision and that of the Federal Court in McMahon, in McMahon the Court was required to define a ‘casual’ by reference to an employment contract, and not an applicable enterprise agreement or modern award.

Nevertheless, employers still need to be mindful about accurately categorising their employees, as this is an issue that will likely be the subject of contention in the future.