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Casual Employees & Annual Leave - Sorting Fact from Fiction

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There has been a stir recently in the world of industrial relations. On Thursday 16 August 2018, the Federal Court found that a worker Mr Skene, who was supposedly employed on a casual basis, was in fact employed on a permanent full-time basis and was entitled to an annual leave payment upon termination of his employment.

The decision in Skene v WorkPac Pty Ltd has sparked spread of misinformation online that misrepresents the critical factors of the case. Some have gone as far as to make statements such as "all casual employees who work regular and predictable hours will be entitled to annual leave payments". This is not the case.

While the decision presents an interesting development, it does not spell the end of casual employment in Australia.

The primary issue integral to the decision in Skene, is that the Fair Work Act 2009 (Cth) (Act) doesn’t provide a definition of ‘casual employee’.

The Court’s prior stance on determining whether an employee is employed on a casual basis was to consult the definition given by the relevant industrial instrument that applies to the employee, be it enterprise agreement or modern award.

In Skene, the Court did just that, and it found that the employee’s enterprise agreement, like the Act, didn’t contain a sufficient definition for casual employees.  The Court then looked to the ‘ordinary meaning or usual connotation,’ as defined by the general law, to work out whether Mr Skene was in fact a casual employee and it uncovered conflicting definitions.

The Court found that no single, agreed definition of a casual employee can encompass all forms of casual employment.

Rather, the factors to take into consideration when determining who is a casual employee is the regulatory regime (such as the Act, awards and enterprise agreements), the contractual terms of the employment and importantly, the way the employee actually works taken in conjunction with the instruments governing the employment.

The Court’s concern was that the ability for an employer to determine the category of a worker’s employment has the potential to lead to arbitrary and capricious results. The parties cannot create something which has every feature of a rooster but call it a duck and insist that everybody else recognise it as a duck.

An objective assessment needs to be undertaken to determine whether the intent to employ on a casual basis has been put into practice and if achieved, has been maintained.

In its decision, the Court found that Mr Skene did not meet the insufficient and contradictory definition of a casual employee given by the agreement that applied to him.

The Court looked to the general law’s definition of a casual employee being ‘the essence of casualness 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’.

This is not to say that a casual employee’s work pattern may turn out to be regular and systematic. Yet Mr Skene’s roster was set 12 months in advance and the roster was a stable and organised arrangement of 7 days on and 7 days off.

Upon an objective assessment of the facts, it was apparent that even though Mr Skene was told that he was a casual and was paid as such, he didn’t meet the limited definition of a casual as defined in his enterprise agreement, or the meaning given by the general law.

This decision highlights the tension between the manufactured definition of a casual employee in an industrial instrument and the definition developed by case law.  What is apparent however, is that employer’s will need to consider the whole of the employment relationship between it and its employees to determine the best basis upon which to engage the relevant employees.

Key Takeway

The takeaway from this case is to review the way that casual employees are working within your business. Are they working within what is consistent of the definition of a casual employee as given by the modern award or agreement that applies to them? If it’s unclear what that definition is, are they working established, communicated well in advance rosters, with the appearance that they will have ongoing work with you indefinitely?

The myriad of factors that can affect how an employee will be classified by a Court can make this determination difficult. If you are concerned about your casual staff base, or have questions regarding your casual employees, contact one of our workplace experts.

If you need help with this or other workplace related matters please contact a member of our Workplace Team for advice.

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