3 minutes reading time (581 words)

Are your Casuals really Casuals?

On 16 August 2018 the Full Federal Court delivered a judgment which will likely have wide-ranging implications for the employment of casual employees across Australia.

The primary consequences arising from the decision at this stage appear to be that:

  • Regardless of the provisions or an award or enterprise agreement (EA), if an employee has a regular and predictable pattern of work with an expectation of ongoing engagements, they are likely to be deemed permanent rather than casual, and
  • Where an employee commences employment with irregular hours under a casual contract, the casual can "morph" into a permanent employee during the course of the employment relationship, even if the parties continue to describe the relationship as casual.

As a result of the decision, a large number of employees currently described by employers as 'casuals' could in fact be deemed permanent. This in turn makes these employees potentially eligible for entitlements associated with permanent employment, including paid annual and personal/carer's leave, notice and redundancy payments.

The Fair Work Commission has already determined that most casuals employed for longer than 12 months may apply to their employer to be made permanent, however the employer was entitled to decline on reasonable grounds (e.g. that long term, sustained employment was unlikely). Further, most awards and EAs simply describe a casual as an employee "paid and engaged as such" – meaning that as long as an employee was called a casual and paid a casual loading, they could legitimately be considered casual. However, in this most recent decision, the Full Federal Court has dismissed this approach to casual employment as being simply wrong.

The Full Court stated that in order for an engagement to be considered casual:

  • there should be no certainty about the period over which the employment is offered; and
  • there should be an informality, uncertainty and irregularity about the engagement.

So, if an employment relationship has a level of certainty, regularity and predictability about the hours to be worked (by both parties), then it is likely to not be seen as being consistent with a casual engagement. The Court also considered the casual loading irrelevant – and instead looked at whether the intent of the parties to make the relationship casual "has been put into practice" by assessing the actual pattern of work.

As mentioned above, the Full Court also found that employees can be genuinely engaged as casuals to begin with, but can morph into permanent status if the characteristics of the relationship change. The Court in its ruling stated that: "an employment which commences as casual employment may become full-time or part-time because its characteristics have come to reflect those of an ongoing part-time or full-time employment".

The impact of this decision could be substantial for many employers, to the extent that regular or long term casuals who are actually permanent employees may automatically become entitled to:

  • paid annual and personal leave (accumulating for each year of their service)
  • notice of termination; and
  • redundancy entitlements.

Former casual employees may also be entitled to make a claim for unpaid leave, notice or redundancy, for a period of up to 6 years from the end of their employment.

While the detailed implications are still being considered, employers should immediately review their casual workforce to determine whether any of their existing casuals are at risk of being considered permanent, and to ensure that only genuine casual engagements exist.

This article is current at the date of publication, provides general information only and should not be regarded as legal advice. Call us for assistance related to your specific circumstances, if required.

Right to Request Flexible Work Arrangements
How's Your Thinking?

Related Posts