Federal Court Casuals_Perm_Employees

Late last week the Federal Court delivered a judgment that will impact the employment of casual employees across Australia.

Employers should consider the options and potential costs and benefits of employing casuals on any regular or ongoing basis.

The Case

The case involved a labour hire company, WorkPac, that supplied a worker, Mr Skene, as a casual truck driver to a coal mine in Queensland. The truck driver claimed that he was in fact a permanent full-time employee of WorkPac, and, as such, he was entitled to annual leave or payment in lieu when his employment ended. WorkPac denied the claim arguing that he was a casual worker and was treated as such under the appropriate enterprise agreement. The court found in favour of Mr Skene.

Employers going-forward may now face claims from workers for entitlements reserved for permanent employees, such as claims for annual leave and personal leave. Workers who were employed under a casual status and who were sick may have a claim for back-paid sick leave. Casual workers whose employment may have been terminated may also have a claim for notice too.

The Consequences

The primary consequences arising from the decision are that:

  1. Regardless of the provisions that apply to a workforce under awards or enterprise agreements, if an employee has a regular and predictable pattern of work with an expectation of ongoing engagements, they are likely to be permanent as opposed to casual.
  2. Where an employee commences employment with irregular hours under a casual contract, the casual can morph into a permanent employee during the course of the employment relationship, notwithstanding that the parties continue to describe the relationship as casual.

As a result of the decision, a large number of employees currently described by employers as ‘casuals’ could in fact be permanent. Industry groups have called for immediate steps to clarify the status of entitlements for casuals.

Suggested Employer Actions

Employers should review their existing casual workforce and see if any workers fall into the “Skene” category. They should consider if those workers should be made permanent and this should be thoroughly documented.

Employers ought to consider the options and potential costs and benefits of employing casuals on any regular or ongoing basis.

A 360HR Associate can provide professional advice to employers to clarify any concerns regarding the employment arrangements of their casual employees.

By John Arraj – Associate 360HR

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