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New uncertainty for casual employment

Casuals are excluded from accessing the entitlements to paid annual leave, personal/carer’s leave and compassionate leave provided by the National Employment Standards (NES) in the Fair Work Act 2009 (Cth).

Casuals are excluded from accessing the entitlements to paid annual leave, personal/carer’s leave and compassionate leave provided by the National Employment Standards (NES) in the Fair Work Act 2009 (Cth). In 2018, the Full Federal Court ruled in Workpac Pty Ltd v Skene that a person is a casual when there is an absence of a firm advance commitment of the duration of the employee’s employment, or the days or hours the employee will work. If neither the employer nor the employee gives this commitment, the person is a casual, at least for the purposes of the exclusion from paid leave entitlements under the NES.

The Federal Government responded to this ruling by amending the Fair Work Regulations 2009, with effect from 18 December 2018, to assist an employer that employed a person ‘on the basis that the person is a casual employee’ and paid that person a clearly identifiable loading amount to compensate the person for not having one or more relevant NES entitlements. If that person is found to be in fact not a casual employee for the purposes of the NES and they make a claim to be paid ‘an amount in lieu of one or more of the relevant NES entitlements’, the employer may make a claim to have the loading amount taken into account in determining any amount payable in response to that claim.

In a sequel to the Skene ruling, the Full Federal Court in Workpac Pty Ltd v Rossato (2020) has issued a decision that has substantially undermined the capacity of employers to rely on this Regulation. In this case, Mr Rossato claimed payment for the personal/carer’s leave and compassionate leave he had taken. The Court ruled that he had not claimed an amount in lieu of NES entitlements to paid leave. In fact, he had claimed the payment due pursuant to those entitlements. Therefore, the Regulation did not assist the employer.

In the Rossato decision, the Court adopted the ‘firm advance commitment’ test that was developed by the Court in Skene, and identified that this was unlikely to be found where:

In one of the contracts that Mr Rossato signed, it was stated he had the ability to “refuse and cancel” shifts or terminate the assignment. While this suggested the absence of a firm advance commitment, the Court noted that it was in fact extremely difficult for Mr Rossato to actually cancel shifts or refuse to work them, and it would expose him to disciplinary sanctions if he did so.

The Rossato and Skene decisions do not mean the vast bulk of casuals can claim NES leave entitlements, even where their employment is regular, systematic and ongoing. In most cases of casual employment, the employers and employees have some capacity to pick and choose the blocks of working time. The employee’s capacity to accept or decline shifts offered to them, if genuine and real, will usually mean the employee is excluded from accessing NES paid leave entitlements.

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