The Facts
Worker engaged by labour hire company to work in Queensland mine
A man was engaged by a labour hire company that supplied labourers for mining companies.
Between April 2010 and July 2010, the man worked as a βdrive-in, drive-outβ dump truck driver at a coal mine. He drove six hours from his home in south-east Queensland, worked for a number of days, then had a number of days off.
The labour hire company had different agreements for different employment types. It had the man sign a βCasual or Fixed-term Employment Agreementβ to cover the relevant period. This agreement covered duration of employment, assignments with the company, leave entitlements for fixed-term employees and notice of termination periods.
Worker engaged for new fly-in, fly-out position
In July 2010, the man successfully applied for a job as a βfly-in, fly-outβ employee at another Queensland coal mine through the same labour hire company. At this time he was given a βNotice of Offerβ by the company specifying that he was assigned to the new mine and that the same general terms and conditions in his earlier employment agreement would apply.
When the man commenced work in July 2010 at the new mine, he attended an induction where he was told he would work 12.5 hours per shift under a roster arrangement of seven days on, seven days off, and would be paid weekly.
Worker receives roster for entire year of work
When he commenced the new role,Β the worker was given a copy of his rosterΒ covering the period until December 2010.Β In January 2011, the mining company gave him a new rosterΒ covering the period until December 2011.
After his employment came to an end in April 2012, the worker brought a claim in the Federal Circuit Court for unpaid annual leave entitlements. It was up to the court to decide whether he should in fact receive such a payment.
Expert commentary on the court's decision
Court finds in favour of employee
TheΒ case was originally heard in theΒ Federal Circuit Court, inΒ Skene vΒ WorkpacΒ Pty LtdΒ [2016] FCCA 3035Β andΒ Skene vΒ WorkpacΒ Pty Ltd (No.2)Β [2017] FCCA 525, before making its way to theΒ Full Court of the Federal Court, inΒ WorkpacΒ Pty Ltd v SkeneΒ [2018] FCAFC 131.Β Β
The appeal judges agreedΒ with the worker,Β MrΒ PaulΒ Skene, rejecting the arguments of the labour hire company,Β WorkPacΒ Pty Ltd,Β that Mr SkeneΒ shouldΒ notΒ be paid annual leave accrual on termination.
Does the term βcasual employeeβ have more than one meaning?
The case hinged on the definition of the term βcasual employeeβ and the application ofΒ section 86Β at the beginning of Division 6 of theΒ Fair Work Act.Β Division 6 deals with annual leave. Section 86 states: βThis Division applies to employees, other than casual employees.βΒ
WorkPacΒ argued that the term βcasualΒ employeeβ in section 86 should be understood not in its usual legal sense, butΒ as having its βcommon industrial meaningβ, thatΒ a casual employee is an employee designated as such by the applicable industrial instrument.Β Β
WorkPacΒ contended that this was an βentrenched notionβ of what had been commonly understood to beΒ a casual employee by federal industrial tribunals for the past 70 years.
Meaning of βcasualβ is consistent throughout Fair Work Act
In makingΒ itsΒ decision,Β theΒ court dismissedΒ WorkPacβsΒ arguments and said that there was no βcommon industrial meaningβ applicable to the term βcasualβ in section 86Β of theΒ Fair Work ActΒ andΒ that it was incorrectΒ to suggest that the section contained a different meaning than other parts of the Act.
TheΒ judgesΒ held thatΒ Mr Skene was unable to leave the worksite due to the nature of his work, was expected to be at work for the entirety of his rostered time and was given the expectation of at least a year of rostered days.
Specifically, theΒ court said thatΒ Mr SkeneΒ had no choice inΒ hisΒ daily working arrangements and that there wasΒ βno opportunity for him to choose not to work any particular shift or hours offered to himβ by his employer.
WithΒ an arrangementΒ of this nature,Β Mr SkeneΒ had a reasonable expectation of his job being more than a mere casual engagement. For the purposes of section 86,Β he wasΒ entitled to annual leave.Β
βEssence of casualnessβ in employment law
The judgment referred to a previous case, inΒ which theΒ βessence of casualnessβΒ was described as theΒ βabsence of a firm advance commitment as to the duration of the employeeβs employment or the days (or hours) the employee will work.βΒ (SeeΒ HamzyΒ v Tricon International Restaurants trading as KFCΒ [2001] FCA 1589.)Β
The appeal court also quashed the primary judgeβs reasons not to impose a fine onΒ WorkpacΒ and remitted the matter to the Federal Circuit Court for determination of the compensation amount payable to Mr Skene and the penalty amount to be imposed onΒ WorkpacΒ for breaches of theΒ Fair Work Act.
Employers must ensure workers receive correct entitlements
Employers must be careful to ensure that their employees are correctly determined as either βfull timeβ,Β βpart timeβ or βcasualβ. Employers must be aware that there is no such thing as a βfull time casualβ employee and such titles are confusing for all parties.Β
If a casual employee has a reasonable expectation that their engagement will continue into the foreseeable future, it is prudent to review your practices to ensure that employees are receiving their correct entitlements.Β A good review to do is to look at your payroll.
In the example case, the employee was being paid a flat rate for all hours worked. Casual employees should receive a distinct casual loading on top of their base rate. Paying a flat rate could be confused with a rateΒ forΒ full-timeΒ orΒ part-time employees. Casual employees are paid a loading in exchange for not accruing annual leave and personal leave.
Casual employees are good to fillΒ gapsΒ in your labour force,Β butΒ if they start to work regular, full time hours (38Β hours per week or more) over aΒ lengthyΒ period, you should seek legal advice about the status of the employee.Β IfΒ a worker hasΒ little choice inΒ his or herΒ working arrangements, they are probably not a casual employee.
Casual conversion clauses in modern awards
Further, in some industries (theΒ vehicleΒ industry,Β for example), theΒ modernΒ awardΒ covering the industryΒ may contain βcasual conversionβ clauses.Β
This meansΒ that if a casual employee is working the same hoursΒ orΒ days for longer than six months, they are entitled to request to be madeΒ a permanent employee. Employers must have valid reasons for refusing such requests and should be carefulΒ aboutΒ refusing.
Designating a worker as a casual will not help employers
The crux ofΒ WorkPacΒ v SkeneΒ is that describing the employment relationship asΒ βcasualβΒ isΒ not of itself determinative. An employment contract might specify that a worker is aΒ βcasualΒ employeeβ, but this will not override the true legal relationship which is determined by a full consideration of the circumstances.Β
Michael Black QC, inΒ Re Porter;β―Re Transport Workers Union of AustraliaΒ said it perfectly:Β βThe parties cannot create something which has every feature of a rooster, but call it a duck and insist that everybody else recognises it as a duck.β
For information about a related case, please see Casual worker rights can include annual leave and sick leave, says Federal Court.
For further information about workplace agreements, please see our 2023 article Shelf life of zombie agreements set to expire shortly.
See also:
Contractor or employee – the grey area of the gig economy
Former Uber Eats courier paid $400,000 in out-of-court settlement
Are you employed in casual work but doing the same job as a permanent employee?