A FIFO worker who was purportedly engaged as a ‘casual’ under an enterprise agreement has successfully claimed an entitlement to annual leave under both the National Employment Standards (NES) and the terms of the enterprise agreement.
The full Federal Court decision in WorkPac Pty Ltd v Skene  FCAFC 131 opens the way for further claims by employees who are engaged as casuals but work regular and consistent hours.
Designation as a “casual” and payment of a casual loading are not determinative
In this case, the employee:
- was engaged by labour-hire company WorkPac as a ‘casual’ in the employment terms and conditions, which included an enterprise agreement;
- consistently worked 12 hour shifts over an approximately 2 year period on a ‘7 days on, 7 days off’ roster that was set 12 months in advance;
- was provided with flights and accommodation at no cost under a FIFO arrangement; and
- was paid a flat hourly rate, although this did not expressly include or refer to a casual loading.
The Court said that designation as a ‘casual’ and the payment and acceptance of a casual loading were not determinative. Rather, the conduct of the parties and the real substance or practical reality of the relationship were to be objectively considered.
The fact that an employee could potentially be paid twice for the same entitlement due to payment of a casual loading was not a basis for finding that the employee was a ‘casual’.
The Court ultimately found that the employee was a permanent employee for the purposes of both the NES annual leave provisions and the enterprise agreement.
The essence of casualness under the NES annual leave provisions
The Court rejected WorkPac’s argument that because the employee was designated as a casual under the enterprise agreement, it followed that the employee was a “casual employee” for the purpose of the NES annual leave provisions.
The Court said that the meaning of ‘casual employee’ in the NES annual leave provisions was the legal meaning, the essence of which is “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“. Key indicators of such an absence will be irregularity, uncertainty, unpredictability, intermittency and discontinuity in the pattern of work.
The employee did not meet this test, because:
- his pattern of work was regular and predictable, continuous and not subject to significant fluctuation; and
- there was plainly an expectation that he would be available on an ongoing basis to perform the duties required of him (as evidenced by the roster set 12 months in advance and the FIFO arrangements).
The meaning of ‘casual’ under an enterprise agreement depends on the terms of agreement
The agreement allowed for ‘casual’ employees but did not specifically define what that category of employee meant, other than stating that they were engaged by the hour and either paid a casual loading or a flat rate of pay which incorporated a casual loading. WorkPac was to “inform” each employee of their status at the time of their engagement.
In the absence of a specific definition or other mechanism for the categorisation process, the Court held that the term ‘casual’ in the agreement was intended to have its legal meaning. This employee was not a ‘casual’ according to that meaning (for the reasons discussed above).
The act of merely informing the employee of the employer’s understanding that the engagement was a ‘casual’ one did not override this.
Now is the time for employers to review their casual engagements
Each engagement is likely to be different and needs to be considered on its individual facts, along with the terms of any enterprise agreement. Casual engagements should also be periodically monitored, as the nature of an engagement can change over time.
If you have concerns about the basis for a casual engagement or whether appropriate entitlements have been provided, seek legal advice.
When reviewing and monitoring your engagements, keep in mind the following:
- Even if an employee is purportedly engaged as a ‘casual’ and paid a casual loading, these factors are not determinative of whether the employee is in fact a casual for the purpose of the NES provisions. A Court will assess the real substance of the relationship between the parties, and apply the legal meaning of ‘casual employee’ referred to above.
- Even if the employee is purportedly engaged as a casual under an enterprise agreement, whether that employee is in fact a casual for the purposes of the agreement will depend on how the term ‘casual’ is to be interpreted under the agreement. This will depend on the terms of the enterprise agreement (including whether there is a definition of ‘casual’ or other mechanisms that impact on the categorisation process).
- The employee in this case only claimed annual leave, however the decision leaves it open for workers to claim other permanent entitlements such as personal leave, notice of termination and redundancy pay.