In a significant decision which has widespread implications for the future employment of casual employees, WorkPac Pty Limited v Skene  FCAFC 131 (WorkPac v Skene), the Full Court of the Federal Court upheld a decision finding that an employee – who was described as a casual, and paid accordingly, was in fact a permanent employee.
As a consequence, the employee was entitled to annual leave under both the National Employment Standards (NES) and the enterprise agreement which applied to his employment.
The Court held that casual employment is characterised by ‘no firm advance [mutual] commitment to continuing and indefinite work according to an agreed pattern of work’. This lack of a firm commitment is reciprocal, with the employee similarly not providing a commitment to ongoing employment. This is ‘the essence of casualness’.
This decision highlights the need for employers to review the substance of their employment relationships, and how their casual employees are currently engaged. In our experience, this is not a ‘one way street’. We are aware of many employees who prefer to be classified as a casual employee, not least due to the immediate benefit of the additional 25% loading.
Whilst there has not been and will not be a legislative change as yet, this is likely to result, pending the conclusion of additional and subsequent legal cases.
We recommend that employers take the following steps in light of the Court’s decision to minimise their risk:
- Have clear written casual employment contracts.
- Review how your casual employees are engaged. Ask casual employees to nominate their availability. How far in advance is there a stated commitment to work? If employees are rostered, can it be said that the employment engagement beyond the roster period is not fixed and are variable? In undertaking this assessment, keep in mind that key features of casual employment include irregular work patterns, unpredictability and intermittency.
- Where practical, seek to convert non-genuine casual arrangements to full-time or part-time employment, and/or consider changing the work arrangements. Refer to the casual conversion clauses recently added in the Modern Awards for more information. Any changes to work arrangements must be done by way of mutual agreement.
- Review employee contracts and pay records to ensure that casual loadings are attributed a clearly identifiable amount (separate item on the payslip), and expressed to be able to set off with an identifiable value for annual and personal leave that would otherwise accrue.
For more information on WorkPac v Skene, or the impacts on employers of this case, please don’t hesitate to contact the team at Cooper & Associates Accountants.