The state of casual engagements – the wild west of employment law

Kneejerk reactions to accommodate the impacts of the recent decision in WorkPac Pty Ltd v Skene [2018] FCAFC 131 (Skene) may be unnecessary, at least for now.

However, front end management of a business’ casual employees may avoid issues down the track.

In Skene the Full Court of the Federal Court of Australia accepted a casual employee’s claim he was entitled to similar entitlements to those typically provided to permanent employees, such as annual leave.

One curious point raised in Skene was the following comment made by the Court:

what is agreed to at the commencement of an employment is relevant to the characterisation process, but an employment which commences as casual employment may become full-time or part-time because its characteristics have come to reflect those of an on-going part-time or full-time employment.”

The consequence of this is that businesses should be wary that the true employment status of their workers is in fact a point in time assessment (not at the point in time the agreement is entered into).

What should your business do?

Employers should be careful to assess the nature of purported casual employees’ employment. This will be particularly pertinent where your business engages casuals on fairly consistent hours week to week.

The challenge for businesses will be to ensure that the essence of “casualness” (for lack of a better word) is captured on an ongoing basis. The purpose of the engagement will be crucial:

  • Is the employee engaged to fill a gap in your workforce on an “as needed basis“?
  • How regular are the hours of work?
  • Is the employee filling a temporary absence or engaged to address a short term increase in workflow?

One cause for concern may be circumstances where a casual employee is working on the same basis as permanent employees of the business over a sustained period of time.

In circumstances where the business is concerned about the true status of its casual employees, it may opt to:

  • engage the employee on a permanent basis (whether full time or part time);
  • continue to treat the employee as a casual employee, and run the risk that a claim be brought and that the employee be found to be a permanent employee, with all entitlements based on the casual loading rate; or
  • vary the arrangement to ensure the relationship is more casual in nature.

Factors considered to ascertain the true nature of the relationship

Given the specifics of the Skene case, the line of where a casual engagement will become one of permanent employment is blurred. However, the Court found the following factors were relevant, but not necessarily determinative as to whether an employee is truly a casual employee:

  • the employee and the employer consider that the employee is in casual employment;
  • the employment agreement defines or describes the employee as a casual employee;
  • the employee is engaged by the hour or for a fixed period (depending upon the nature of the employment); and
  • the employee can be terminated on very short notice.

Despite the findings in Skene, a casual employee has recently made a similar claim for entitlements in WorkPac v Rossato (QUD724/2018) (Rossato). No decision has been handed down to date and employers may be best placed to delay implementing drastic changes to their methods of engagement (whether this be under enterprise agreements or otherwise) until Rossato is finalised.

If you require any further advice in relation to your employment obligations following Skene or Roassato, please contact our Employment, Safety and Migration team.

This article was written by Stella Gehrckens, Lawyer – Employment, Safety and Migration.