The Workpac decision – are your casuals really casual?

In brief

The Full Federal Court recently decided that a casual fly-in fly-out labour hire worker was not really a casual and was therefore entitled to annual leave. Senior Associate Stephanie Burn reports.

How does it affect you?

• Casual employees who are not in fact casuals might be entitled to various types of paid leave (including annual leave), and notice of termination, redundancy pay, public holidays and, in some circumstances, access to the unfair dismissal regime.
• Employers should carefully assess whether their casuals have set hours or shifts, or any certainty about being offered work in the future – if they do, they might not be casual. Casuals should not have guaranteed work, a roster set too far in advance, or regular and consistent days and hours of work. Employers who rely heavily on a casual workforce should look closely at these arrangements.
• It should be made clear to casuals (eg in their contract and/or on their payslip) that their hourly rate includes any applicable casual loading. The contract should allow the employer to 'set off' the amount for the entitlements the employee doesn't receive because they get the loading.

Background

In 2016, the Federal Circuit Court decided that a casual dump-truck operator at a Queensland mine was entitled to annual leave because of the regular and predictable nature of his work. Over a period of almost two years:

• he worked 12.5 hour shifts, on a seven-day-on and seven-day-off roster set in January for the whole year;
• he worked with the same people each shift, including other labour hire workers and permanent employees;
• his contract provided for termination by one hour's notice; and
• he received no paid leave, his contract classified him as a casual, he had to submit timesheets, and he was paid by the hour according to a flat rate – stated in his contract to include 'a loading in lieu of leave entitlements'.

In April 2012, WorkPac terminated the dump-truck operator's employment. He did not receive a payment in lieu of untaken accrued annual leave and made a claim for compensation for unpaid annual leave. WorkPac was ordered to pay the employee $21,000 in compensation plus interest. WorkPac appealed.

The decision

The Full Federal Court dismissed¹ WorkPac's appeal and upheld the earlier decision. The court decided that the employee was entitled to annual leave because the employer gave some advance commitment about future work, and there was some regularity in his work pattern and hours. WorkPac was required to pay him the compensation and interest.

The Federal Circuit Court is yet to decide on an appropriate penalty against WorkPac for not paying the employee his accrued annual leave on termination.