Recent Court Cases About Casual Employees

Two cases with major implications on casual employees have been through the courts in the last few years.  The first case in 2018[1] determined that even if someone was initially employed on a casual basis, if that person worked in a capacity that could be described as permanent, the employee could claim for benefits normally enjoyed by permanent staff  even though they received a casual loading.

The matter was considered again last week by the Federal Court and the court’s prior decision was confirmed[2] – casual employees can claim for holiday, sick and other leave if they have actually been working as permanent staff.  However, questions are being raised about the lack of fairness of staff accepting a 25% casual loading AND then claiming additional leave loading.

 

Where Will the Legal Situation Go Next

The question then centres around what happens next?

Some believe that this amounts to casuals ‘double dipping’ if they receive the casual loading and also receive holiday, sick and carer’s leave.  These parties will consider taking the matter further and this may require parliament to consider the matter further and make adjustments to relevant legislation.

The other side involves those who have been working on a casual basis for a long time and will seek to claim for holiday, sick and carer’s leave moving forward.  Thomas Elmas[3] believes there is up to $8B in backpay claims with a number of class action suits ready ready to run after the recent decision.

 

Distinguishing Between Casual and Permanent Employees

Wherever these issues move in the future, it is important that employers who use casual employment consider whether their employees are genuinely casual or better classified as permanent staff.

The characteristics of casual employment were described by the court in 2001 as:

  1. The absence of a firm commitment of the length of employment, especially an absence of indefinite employment.
  2. The absence of consistent pre-planned shifts or days and times of work.
  3. The presence of irregular and unpredictable work patterns

Conversely, if your staff are working with the expectation or more or less regular hours each week and have an expectation the work is available indefinitely, they might be considered permanent.

 

What Can You Do If You Believe Your Staff Should Be Re-Classified?

Even though you might have been paying your staff a leave loading, if your employee can argue that they are actually permanent staff, this recent decision may expose your business to risk.  The Fair Work Ombudsman[4] has described the characteristics of casual employment and noted that it is possible for people to be reclassified where the employer and employee agree.

However, employment problems can be complex and before you decide to do anything you should first, gather your data and determine if you may have employees who are misclassified, and second, seek the advice of an employment law specialist.

 

[1] WorkPac Pty Ltd v Skene [2018] FCAFC 131

[2] WorkPac Pty Ltd v Rossato [2020] FCAFC 84

[3] https://www.smartcompany.com.au/business-advice/legal/casual-leave-entitlements/

[4] https://www.fairwork.gov.au/Employee-entitlements/Types-of-employees/casual-part-time-and-full-time/casual-employees/

 

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