Are your award/agreement covered casual employees working regular and predictable hours? If so, they could be considered permanent employees and have claims for permanent employee entitlements, such as annual and sick leave following a recent decision of the Full Federal Court.
Key points to note:
Most awards (and some enterprise agreements) define a casual employee as one who is “engaged and paid as such”. In those circumstances, employers who call an employee a casual and pay them the casual loading, have been able to legally characterise that person as a casual employee (irrespective of the regularity of their work hours or consistency of engagements).
The recent decision of the Full Federal Court in Workpac Pty Ltd v Skene changes the traditional approach to identifying a casual employee (and aligns with the common law authorities regarding award/agreement free casual employees). The Court noted that when identifying the status of an employee, “the conduct of the parties to the employment relationship and the real substance, practical reality and true nature of that relationship will need to be assessed”. The Court said that a causal relationship will exist if:
• there is no certainty around the period over which the employment is offered; and
• there is an uncertainty and irregularity about when work will be performed.
In that decision, the employee in question was covered by an enterprise agreement and was both engaged as a casual employee and paid a casual loading, in accordance with the terms of the enterprise agreement; but he worked regular and predictable shifts on a 7 days on / 7 days off basis. The Court found that he was not a casual employee on this basis and ordered that he was entitled to accrued annual leave entitlements on termination.
What does this mean for your business?
This decision means that:
1. An employee who works regular and predictable hours and has a reasonable expectation of ongoing work, could be a permanent employee.
2. An employee who starts out working irregular hours but who subsequently works regular and predictable hours over time, could become a permanent employee.
3. These employees could claim permanent employee entitlements such as paid public holidays, annual leave, personal/carer’s leave, notice and redundancy pay.
What should you do?
If you engage casuals under award/s (or enterprise agreement/s with a similar definition of casual employment to modern awards), you should review your casual workforce and seek advice if your casual employees are, or have been, working regular and predictable hours.