Employers are on notice to urgently review their agreements and classification of working arrangements following a Full Federal Court decision to award annual leave payments to a “casual” mine truck driver.

Given the widespread use of casual employees within the labour hire sector especially, employers will need to carefully and urgently review their arrangements to ensure that there are no sleeping contingent liabilities within their employment arrangements.

What happened?

In 2016 a lower court identified that while labour hire firm Workpac’s offer of employment characterised the fly-in, fly-out driver with a “status of ‘casual FTM'” with no entitlement to annual leave under its agreement, it was the driver’s regular and predictable working arrangements which meant he was an employee entitled to benefits under s86 of the Fair Work Act .

This finding meant that under the National Employment Standards the driver was entitled to payment for accrued annual leave on termination of his employment.

As a result, the court ordered that the driver be paid $21,000 in compensation plus interest of $6700.

This decision triggered the Appeal which was determined on August 16 and upheld the decision in favour of the casual worker..

Critical Lessons

The Court determined that WorkPac’s agreement did not designate the driver as a casual, and the “all in flat rate” did not clearly identify the requisite casual loading.

It was also made clear that the essence of “casualness” in a relationship of employment is to be found in the “absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work“.

Care and precision is required in negotiating and drafting agreements.

Subject to the Fair Work Act being amended to deal with the issue or the matter being overturned on Appeal to the High Court, employers are well advised to consider undertaking an urgent audit of their agreements, classification and work patterns for casual staff.