DOUBT ABOUT STATUS OF CASUAL EMPLOYMENT

A recent decision of the Federal Circuit Court has cast doubt on whether casual employment is in fact that: Skene v WorkPac Pty Ltd [2016] FCCA 3035.

Mr Skene was employed as a dump truck operator by WorkPac, a labour hire company, which supplies workers to mines. His contract of employment with WorkPac designated him as a casual employee and he was paid a fixed hourly rate.

During his employment with WorkPac he had two placements at mines in Queensland. The second mine operator removed him from the mine and he did no further work for WorkPac.

After his employment terminated Mr Skene issued proceedings against WorkPac seeking payment of accrued annual leave, other consequential entitlements and pecuniary penalties.

Judge Jarrett found that, according to his contract of employment with WorkPac, Mr Skene was a casual employee. This, however, did not mean that Mr Skene could not be entitled to annual leave and other entitlements. Although section 86 of the Fair Work Act states that provisions relating to annual leave apply other than to casual employees Mr Skene needed only to establish that his employment was something other than casual to receive entitlements associated with permanent employment.

Judge Jarrett identified six factors that weighed in favour of Mr Skene’s employment being other than casual:

1. It was regular and predictable under 7 days on and 7 days off rosters set 12 months in advance;
2. Apart from one short period arranged with the second mine owner, was continuous;
3. It was facilitated by travel and accommodation provided at no cost to him;
4. The FIFO arrangement was inconsistent with the notion that Mr Skene could elect the days on which he worked without making the necessary arrangements with the mine owner;
5. There was an expectation arising under the contract of employment between him and WorkPac that he would be available according to the roster provided to him until the assignment was complete; and
6. The hours of work were regular and certain as demonstrated by his pay slips.
   As against that Judge Jarrett found three factors that weighed in favour of Mr Skene being a casual employee:
7. He was paid by the hour and had to submit weekly time sheets;
8. His employment was terminable on one hour’s notice; and
9. WorkPac designated his employment as casual and Mr Skene was aware of and accepted that.
   Ultimately, Judge Jarrett found that the essence of casual employment, which 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, was missing in the employment relationship between Mr Skene and WorkPac.
   As the employment was something other than casual, Mr Skene became entitled to annual leave, which is not a benefit of casual employment.
   Although the decision could be said to be limited to its particular circumstances, it might be seen as applying in circumstances where employer and employee believe that casual employment applies but in reality given the certainty of hours and absence of choice as to when an employee works, the employment relationship is in fact other than casual.

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Workers are Employees not Contractors

Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd and others [2015] HCA 45 demonstrates that on arrangement where an enterprise engaged the services of cleaners through a labour hire company and represented to the cleaners that they were contractors not employees, is contrary to section 357 of the Fair Work Act 2009 as sham contracting.

Previously, sham contracting was thought to apply only to misrepresentations the employer made to the worker and not to extend to misrepresentations by a third party, which uses the workers’ services, to the workers status as employee.

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The Standard Employment Contract: A Cautionary Tale

 

It really is a case of ‘buyer beware’ with many business owners downloading or buying standard employment contracts and templates online in an effort to save time and money.

 

Small businesses with limited human resources training are turning to Google and other search engines instead of an employment lawyer.

 

Unfortunately, these standard templates are often outdated and in contravention of the Fair Work Act 2009 (Cth).

 

Some documents offer less benefits than the employee is entitled to receive and do not provide an employer with adequate protection from breach of contract or unfair dismissal claims.

 

The implication for employers includes the risk of penalties of up to $50,000 by the Fair Work Commission for breaching the minimum National Employment Standards.

 

An employment contract should provide employees with the correct leave entitlements and include all important details such as location and hours of work as well as notice requirements in the event of termination.

 

A properly drafted contract will ensure both parties are fully aware of their rights and in relation to leave entitlements and their obligations at the end of the employment relationship. 

 

Do the right thing by your business and your employees and contact an employment lawyer to review your employment contracts and ensure your business is protected from penalties.

 

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