On 21 May 2020, the Full Federal Court reconfirmed that casual employees working regular and systematic hours with predictable periods of working time are likely to be considered permanent employees and entitled to leave, irrespective of their employment agreement and the intention of the parties.
BACKGROUND
In October 2018, the Court in the case of Skene v Workpac Pty Ltd held that a casual employee working regular and systematic hours with predictable periods of working time was in fact a permanent employee who was entitled to leave entitlements.
In early 2019, Clause 2.03A was inserted into the Fair Work Regulations to allow employers to use the payment of a casual loading to offset any leave claims from casual employeeS. The intention of this was remove the ability of a casual employee to ‘double dip’ as had been done in the above case.
YESTERDAY’S CASE
In the case of Rossato v Workpac Pty Ltd (different employee but against the same employer), the Court has again found that a casual employee working regular and systematic hours with predictable periods of working time is considered a permanent employee, and ordered the employer pay to Mr Rossato unpaid annual leave, personal leave, compassionate leave and public holiday payments which he was entitled to as a permanent employee.
The Court found as follows:
- the parties’ description of the engagement as casual in a written contract is not determinative – one must look at all the features of the relationship;
- in contrast with on-going full-time or part-time employees, a casual employee “has no firm advance commitment from the employer to continuing and indefinite work”; and
- the indicia of casual employment and the absence of a firm advance commitment from an employer are “irregular work patterns, uncertainty, discontinuity, intermittency of work and unpredictability”.
The Employer argued that:
(a) it should be able to set-off the casual loading it had paid to Mr Rossato against these unpaid entitlements – the Court rejected this argument, as given the casual loading was expressed to be paid “in lieu” of leave entitlements (which is how casual loadings are often described), the loading could not be said to have been intended to satisfy leave entitlements. Paying “in lieu” means the loading was paid instead of such entitlements.
(b) Mr Rossato should be required to repay to the Employer the casual loadings paid to him – the Court rejected this argument, as there was no provision in the employment agreement requiring the repayment of the casual loading in circumstances where Mr Rossato was not a casual employee, and accordingly, no obligation to repay the monies arose.
WHAT NOW?
The following could happen from this point forward:
1. Workpac could appeal this decision to the High Court
2. Parliament could introduce more stringent provisions in the Fair Work Act 2009 preventing casual employees from ‘double dipping’.
If the law remains as it stands today as a result of yesterday’s Court decision, employers employing ‘casual’ employees working regular and systematic hours could be liable to those employees for annual leave, personal leave, compassionate leave and public holiday payments for up to 6 years – this liability equates to approximately 15% of remuneration already paid to each casual employee.
We have revised our Casual Employment Agreements for our Client Members which contain a specially drafted clause requiring an Employee to repay any casual loadings in the above circumstances.
