Casual or Permanent: Characterising Employees

Posted on December 20th, 2018

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Casual or Permanent: Characterising EmployeesThe Full Court of the Federal Court of Australia has recently emphasised the importance of properly characterising a casual employment relationship.

In WorkPac Pty Ltd v Skene [2018] FCAFC 131, Mr Skene was employed by WorkPac Pty Ltd (“WorkPac”) as a fly in fly out truck driver at a mine. Mr Skene’s employment was terminated by WorkPac. Mr Skene argued that he was entitled to payment in lieu of accrued annual leave entitlements in accordance with the Fair Work Act 2009 (“FWC”) and enterprise agreement.  WorkPac argued that Mr Skene was not entitled to payment of annual leave because section 86 of the FWA and the enterprise agreement excludes casual employees from the entitlement to receive annual leave.

Mr Skene’s employment contract stated that he was engaged as a “casual employee”, however the Full Court held that the term “casual employee” has a legal meaning and is to be determined according to objective factors.

The Full Court determined that 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“. It was noted that this may still include engagements on a regular or systematic basis.

The Full Court found that the following objective factors are relevant to determining whether an employee is a casual employee: the regularity of the worker’s hours or days of work; how the worker is notified of each period of work; the payment of an hourly rate for hours actually worked; any indication that the hourly rate is intended to encompass leave entitlements; absence of payment of benefits associated with ongoing employment; and the employer’s and employee’s right to refuse to offer or accept further work.

In this case, Mr Skene had set hours of work, he was given a roster for a 12 month period, he worked in the same role, with the same crew and carried out the same duties each time he worked. Further, it was not expressly specified that his wage included a casual loading. As such, the Full Court held that Mr Skene was a permanent employee and was entitled to be paid annual leave.

This decision is an important reminder to employers to ensure that their employees are properly characterised as either permanent or casual employees and to ensure correct entitlements are applied.

Katie ThompsonKatie Thompson is a Solicitor at Mullane & Lindsay Solicitors and practises in the Commercial Dispute Resolution and Litigation team. If you require any assistance in this area please contact Katie Thompson to arrange a consultation or contact our Newcastle or Sydney office. 

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