Casual or Labour Hire Employees

Are your casual employees actually casuals?

Recently a full Federal Court upheld a finding that a labour hire casual was in fact an employee entitled to annual leave payments.

Workpac Pty Ltd, a labour hire company, engaged a mine driver to work with Rio Tinto Coal Australia Pty Ltd in 2010. The driver’s employment ended in 2012 amid allegations of misconduct.

The driver argued that he was in fact a full-time employee and entitled to annual leave payments on termination. Workpac contended that it had engaged the driver as a “casual or fixed term employee” under the Workpac Pty Ltd Mining (coal) Industry Workplace Agreement.

The Driver argued his employment was continuous, predictable and determined in advance by rosters and that in fact his employment looked more like a full-time arrangement. The driver worked 12.5 hours each shift on a “7-days-on-7-days-off rotating continuous roster arrangement”.

The Court distinguished between casual entitlements under an award, where the award test for casual employment applies, that is “engaged and paid as a casual” and casual entitlements under the NES, which applies to award and non-award employees and which adopts the common law definition of casual employment, with its focus on irregularity of hours and uncertainty.

Because annual leave is a NES entitlement, the common law test applied. The bench said it agreed with the characterisation of “casualness” in Hamzy v Tricon International Restaurants that 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” is the essence of casualness.

The bench also found WorkPac’s agreement did not designate the driver to be a casual, and nor was it clear his “all in flat rate” provided casual loading.

Members in the labour hire industry should be aware that casuals that are in work arrangements that have an ongoing outlook of work and regular and systematic hours could be deemed Full-time employees under the Fair Work Act.

We would advise to use common law contracts that designate employees as casual, and that the “all in flat rate” provided is inclusive of casual loading.

For more information, contact our Workplace Relations Hotline.

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