By Charles Power
Since the Full Federal Court decision in WorkPac Pty Ltd v Skene (2018) there remains significant uncertainty as to what is a casual employee for purposes of NES paid leave entitlements.
According to WorkPac, a casual will in fact be a permanent employee – and entitled to paid annual leave under the NES – if there is a firm advance commitment from both the employer and the employee as to the duration of the employment or the days (or hours) the employee will work.
In the meantime, the vast majority of modern awards now entitle a ‘regular casual’ employee to request that their employer convert their employment to permanent employment.
A regular casual employee is a casual employee who has in the preceding period of 12 months worked a pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to perform as a permanent employee under the provisions of the award.
So what are your options if you suspect you are engaging a casual that is not – in the eyes of Workpac – a true casual, but the employee does not want to convert to permanent employment?
The Federal Government’s only solution has been Fair Work Regulation 2.03A. If your ‘casual’ employee makes a claim for NES paid leave entitlements, you can rely on the provisions of Reg 2.03Ato offset the casual loading – but only if you have clearly expressed in the contract with that employee that the loading is paid to compensate the employee for not having being paid NES leave entitlements.
This means it is time to revise your casual employment letters. You should be aware however, the Reg 2.03A won’t exculpate you from any penalties for NES contravention.
You may wish to review your casual engagements and rostering systems to avoid your casual engagements being ‘Workpac-like’
In Workpac the Full Court ruled Mr Skene was not a casual because his employment was:
- Regular and predictable. His working arrangements and shifts were set 12 months in advance in accordance with a stable and organised roster;
- Continuous (save for one period of seven days that went unpaid but which was arranged with Rio Tinto); and
- Not subject to significant fluctuation from one day, or one week, or one month, or one year to the next. The hours of work were regular and certain as revealed by Mr Skene’s payslips.
A key factor was the FIFO arrangement under which Mr Skene worked, which provided for his accommodation and storage of his possessions between shifts. The FIFO arrangement was inconsistent with the notion that Mr Skene could elect to work on any day or perform work for others without first making the necessary arrangements. There was plainly an expectation that Mr Skene would be available, on an ongoing basis, to perform the duties required of him in accordance with his roster, until such time as the assignment was complete.
In the meantime, if you are seeking FWC approval for an enterprise agreement that excludes casuals from paid NES leave entitlements you may need to give an undertaking to prevent this undercutting the NES.
The kinds of undertakings being given include:
- Despite the provisions in Clause # of the Agreement (which preclude casuals from paid leave entitlements) the employer will apply the National Employment Standards according to their terms consistent with the decision in Workpac Pty Ltd v Skene (2018) FCAFC 131.
- Casual employees are employees who do not have guaranteed regular hours of work or an expectation of continuing work. A typical casual employee is employed on a daily basis when the need arises.
- This enterprise agreement will not be applied in a manner that is inconsistent with the National Employment Standards.