So, what is the real story about casual employees?

The FederalCourt released its decision of WorkPac Pty Ltd v Rossato  [2020] FCAFC 84 (Rossato), about casual employees in the miningindustry and their access to paid entitlements on 20 May 2020. Since then, themedia, industry groups, unions, lawyers and the Federal government have been vocalabout the impact of the decision.

In reality,if you read the decision, you will see that it does not present anything novel.It has challenged some of the practices and assumptions that have developedover time, regarding the way some employers engage casual staff.

Skene and Rossato

The Court confirmedthe position from WorkPac Pty Ltd v Skene [2018] FCAFC 131; (2018) 264FCR 536 (Skene) that the term 'casual employee' has acquireda legal meaning referable to particular attributes, including:

•    nofirm commitment to the other party;

•    irregularwork patterns;

•    alack of continuity;

•    intermittencyof work;

•    unpredictability;and

•    uncertaintyas to the period of employment.

These all amount to flexible work, which is the essence of casual employment. The challenge has long been that the Fair Work Act 2009 does not define what a casual employee is, and that has left room for interpretation. We have provided a link to another document that discusses Rossato and Skene in more detail if you want to know more about the cases.

What wasnot discussed in Rossato  and Skene, buthas become apparent through extrinsic information, was that the casual employeein both cases was paid less per hour than staff they worked with, who weredirectly employed by the mining company to do the same work. This is asignificant part of the reason the various cases have been filed and pursued.The other issue being pursued is that casual employees, regardless of theirearning capacity, will have difficulty accessing personal finance because banksstill regard casual employment as unreliable. The unions are seeking morepermanency for workers to overcome that situation.

Since the Rossatodecision, the legal representatives for employees have communicated that Skeneand Rossato are highly relevant to coal mining and some other parts of theeconomy, where the outsourced labour hire business model is prevalent. Theyhave stated that the cases do not extend to the majority of casual employees whoare engaged in small and medium businesses, and by extension, not for profitsand social enterprises. Further, the cases are particularly not relevant toindustries like retail and hospitality, where casual work arrangements are morelikely to be irregular and intermittent, consistent with the Court’s definitionand community expectations.

So, how doyou deal with the excitement from casual staff that they may be entitled toback pay for accrued entitlements they previously thought they were notentitled to? Largely, it is unlikely they will be entitled to those accruedentitlements, unless they can demonstrate very similar circumstances to Skeneand Rossato. What you should consider for award covered employees, is thecasual conversion clause that was implemented in late 2018 after Skene was decided.

Casual conversion clauses in Modern Awards

Casualconversion clauses were added to modern awards to provide regular casualemployees the opportunity to convert their employment to permanent status ifthey had worked regular and systematic hours over the preceding 12 months orlonger.

If a casualemployee does convert to permanent employment, it is based on the employee:

• retaininghours consistent with those worked as a casual employee;
• losingthe casual loading;
• beingreliably available to work like every other permanent employee; and
• gainingentitlements including, annual leave, personal/carer’s leave, paid publicholidays and compassionate leave.

The financial impact for the employer isminimal and might be improved because the value of accrued entitlements oftenmay be less than the value of the casual loading.

“By any other name…”

Thesituation has developed in particular industries, that casual employment formsa large part of the employee base. That may have arisen from a time when HRadvisors considered that casual employment was the easier option to managingthe performance and ending the employment of employees. However, that positionchanged when regular casuals, with 12 months of regular and systematicemployment, were given access to the unfair dismissal jurisdiction.

Interestingly,there are many casual employees who, when given the opportunity to converttheir employment to permanent status in late 2018, chose to retain their casualstanding so they could remain flexible in their work hours and receive thehigher hourly rate. It would be difficult for those people to now argue thatthey are not casual employees and so entitled to the accrued entitlementsafforded to permanent employees.

However,there are industries like mining that have demonstrated they require mostemployees to be regular and reliable, giving them long term rosters, subject tochanges from unforeseen circumstances. Largely, it is impractical for thoseorganisations to call a casual employee in at short notice, which is the way mostemployers use their casual employees. This is the heart of Skene and Rossato. Justbecause you call an employee casual does not mean they are. Their employmentstatus will ultimately be assessed on the true nature of the relationship.

The Rossato Effect

What hasbeen the initial effect of the Rossato case? The decision simply confirms thecharacterisation of casual employment as most people already understood it.

Whilst themedia have focused on the headline of casual employees ‘double dipping’, theyhave missed some of the important issues that will have real effect onemployers. Simply put, the Rossato case has highlighted the need for employersto:

• understand the real nature andimpact of the different ways of engaging staff;
• appoint staff in the way theygenuinely need them to function;
• ensure that employment documents arerelevant to the person receiving them and that the details are correct;
• ensure employment contracts arecorrectly completed and are compliant with any industrial instruments thatapply to the employment relationship; and
• ensure that employment documents (e.g.pay slips) comply with the ‘Employee Records’ provisions of the Fair Work Regulations2009.

On 17 June 2020, Workpac filed for special leave to appeal the recent Rossato decision to the High Court, so this matter is not settled and there will likely be other effects on employment arrangements, beyond any decision of the High Court.

Theindustrial framework can be challenging for anyone not used to working with it.There is no substitute for advice and documents drafted by a lawyer experiencedin employment and industrial law. The time spent getting it right at the startcould avoid costly mistakes down the track.

If you are concerned about your employment arrangements, NFP Lawyers can assist you with employment advice and the documents you need to comply with your employment obligations. You can contact us on (07) 3160 0010 or at reception@nfplawyers.com.au.

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The material distributed is general information only. The information supplied is not and is not intended to be, legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice in relation to your specific situation.