Important News

When is employment correctly characterised as casual?

20 September 2018


When is employment correctly characterised as casual?

Meriska Lourens, Associate

The approach to characterising casual employment was the subject of a recent determination of the Federal Court of Australia. This decision necessitates that organisations review their engagement practices around casual employment.

The Facts

The employee was a fly-in-fly-out truck driver and argued that he was a permanent full-time employee because his employment was continuous, predictable and determined in advance. On this basis he claimed to be entitled to payment for accrued annual leave when his employment was terminated.

The employer contended that:

  • it engaged the employee as a casual under its Agreement (making him ineligible for annual leave and other entitlements);
  • the employee was engaged by the hour and could choose when and where to work;
  • the Agreement described the employee as a casual; and
  • both it and the employee regarded his employment to be of a casual nature.

The Decision

The Court was asked to consider whether Parliament intended the words “casual employee” in the legislative provision granting the entitlement to annual leave to be used in their ordinary sense, their legal sense or a specialised non-legal sense.

Ultimately the Court found in favour of the employee and settled on a characterisation of “casualness” as involving an “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 rationale for this is that employees who don’t have this firm advanced commitment will have the capacity to enjoy breaks from work when they choose, and therefore do not need to be guaranteed annual leave.

What a “no firm advance commitment” looks like

The Court outlined a range of indicia relevant to a characterisation of casualness, including:

  • irregular work patterns;
  • uncertainty;
  • unpredictability;
  • intermittency of work; and
  • unpredictability

Taking Stock

The decision has led employer groups to call for changes to prevent casual workers “double dipping” by claiming annual leave on top of a casual loading, and for a clear definition of “casual employees” in the legislation.

Unions have responded to the decision stating that there could be a sizable proportion of employees who have been incorrectly characterised as being engaged casually, and that those that have been in regular and predictable work patterns may be entitled to paid annual leave.

PCS recommends reviewing how your organisation engages with its casual workforce. It is risky for organisations to rely simply on the fact that an employee has been engaged on an hourly basis or that the applicable award or agreement provides for a definition of casual employment where this does not match the actual form and manner in which casuals are in fact engaged.

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