In a landmark decision, the Federal Court has ruled that workers engaged as ‘casuals’ may be entitled to annual leave. The decision in WorkPac Pty Ltd v Skene [2018] FCAFC 131 has paved the way for claims by ‘casual’ workers who are employed on a regular and systematic basis.
In this case, a FIFO worker engaged as a ‘casual’ by labour-hire company WorkPac was held to be a permanent employee. Although the employee was designated as a ‘casual’ and was paid a flat hourly rate, the Court held that the real substance of the working relationship had to be considered.
In order for a worker to be classified a casual employee under the NES annual leave provisions, there must be 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”.
The employee did not satisfy this test because he consistently worked 12 hour shifts on a “7 days on, 7 days off” basis over a period of two years. His roster was set 12 months in advance, which indicated a regular, ongoing employment arrangement.
The decision serves as a warning to employers in sectors that engage ‘casual’ workers on a regular and systematic basis as these ‘casual’ working relationships may actually be classified as permanent arrangements. Employers should also be aware that any ‘casual’ staff engaged on a regular basis may be entitled to other full-time benefits, including paid sick leave, unpaid parental leave and statutory protections against unfair dismissal.
Casual Conversion
In addition, employees who are engaged as casuals may also have the right to request conversion to permanent working arrangements. From 1 October 2018 casual employees engaged under more than 80 modern awards may request to exercise the ‘Conversion Clause’. Some of the affected awards include:
- Banking, Finance and Insurance Award 2010
- Clerks – Private Sector Award 2010
- Fast Food Industry Award 2010
- General Retail Industry Award 2010
- Professional Employees Award 2010
- Restaurant Industry Award 2010
Eligible casuals will include those that have, in the twelve months prior, worked a pattern of hours on an ongoing basis which they could continue to perform as a permanent employee without significantly changing their working arrangements.
Notification Requirements
Employers must ensure that they notify any relevant casual staff of their right to request a permanent employment arrangement by the required date. This can be done by providing all casual employees with a copy of the relevant casual conversion clause, found in the relevant award.
Although the right to convert to permanent employment is not an automatic one, employers must have ‘reasonable grounds’ to refuse such a request. These may include circumstances in which an employee’s job will not exist in 12 months, or where conversion to a permanent arrangement will require a significant increase in hours worked.
Moving forward, employers should take the time to carefully review the list of affected awards to determine whether their employees have the right to request conversion to permanent employment, and indeed whether notification is required.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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