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Casual employee wins landmark case to receive permanent entitlements

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On Wednesday, 20th May, 2020 the Federal Court ruled that a casual worker who worked for labour hire company, WorkPac from July 2014 until April 2019 at several mines operated by Glencore Australia had been wrongly classified as a casual and should have received entitlements provided to permanent employees.

Background:

The employee wrote to WorkPac in October 2018 claiming he was not a casual employee, seeking paid annual leave, personal leave, paid compassionate leave, and public holidays.

As WorkPac were involved in a previous ruling, they sought application to the Federal Court to declare that the employee was a casual employee by common law, under the Fair Work Act and under their enterprise agreement that the employees was classified as a casual field team member and not a permanent field team member.

The bench considered the meaning of ‘casual employee’ as “an employee who has no firm advance commitment from her or his employer to continuing and indefinite work according to an agreed pattern of work”.  The bench also considered the nature of the six contracts the worker worked for them.

In considering this, it was determined that it was WorkPac’s statutory obligation to provide the employee with permanent entitlements. 

Whilst WorkPac claimed consideration that the casual loading paid should offset entitlements owing, the bench disagreed due to leave being for the purpose of a break from work. Notably, Justice Bromberg said that “there is a superficial attraction to the notion that something given in substitution of an entitlement has an equivalent value to the entitlement itself and therefore of the same character”.

WorkPac further claimed restitution for payment of casual loading as if they were paid as permanent their rate would have been lower.  The Bench rejected this.

Employer groups are seeking legislative clarification on casual employment as this ruling will have impact on future claims.

It is important as an employer to ensure that you are employing your casuals accurately and remember that you are unable to contract out of the law.

What you should do now:-

  • Review existing casual agreements to minimise the risk of payment of certain entitlements to casual employees ie., check if you have appropriate off set clauses;
  • Consider the following when looking to employ someone as casual; will this position work set, inflexible hours providing a level of certainty of ongoing employment. If so, they should not be employed as casual.
  • Monitor your casuals closely. If their arrangements have changed where they may be deemed no longer a casual, consider converting them to permanent employment.
  • Consider if the employee will be ‘long term’ casual.  Remember casuals  can be more expensive to employ and there are protections for certain casuals to unfair dismissal.

For assistance with reviewing your casual employees, contact our advisors at [email protected] or 1300 720 004.

Information in HR Advice Online guides and blog posts is meant purely for educational discussion of human resources issues. It contains only general information about human resources matters and due to factors such as government legislation changes, may not be up-to-date at the time of reading. It is not legal advice and should not be treated as such.

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