Being classified as casual may not always fit the definition under the Fair Work Act 2009 (Cth). This causes situations whereby misclassifying a permanent worker as a casual impact their entitlement to statutory benefits like annual leave.[1] So how do you know if you are a casual or full-time employee?
This article explores the revised definition of casual employment and the WorkPac Pty Ltd v Skene [2018] FCAFC 131 case, where Skene was awarded annual leave despite being labelled as casual.[2]
WorkPac v Skene – differentiating a casual or full-time employee
Facts:
From July 2010 to April 2012, Mr. Skene worked as a dump truck operator at a Queensland mine through WorkPac, with a fixed roster of 12.5-hour shifts, 7 days on and 7 days off. Despite this regular schedule, he received no casual loading or leave entitlements.
After his termination in April 2012, he challenged his casual status, claiming his consistent work pattern had qualified him for annual leave. [3]
Arguments and Decisions:
WorkPac’s Argument: WorkPac claimed Mr. Skene was a casual employee per his contract and enterprise agreement, and that his casual loading excluded him from annual leave. They argued that casuals are defined by traditional agreements regardless of actual employment patterns.[4]
Decision: The Federal Court ruled that the Fair Work Act’s casual definition should align with common law’s view of irregular and unpredictable hours. Since Mr. Skene’s consistent, scheduled work indicated a permanent relationship, he can receive annual leave, despite the casual classification and loading.[5]
Double Dipping:
Double dipping occurs when an employee receives casual loading and statutory entitlements like annual leave, resulting in double compensation.[6] The Court ruled that Mr. Skene was entitled to annual leave despite receiving casual loading because it wasn’t itemized. Furthermore, the court classified him as a permanent employee, meaning he was entitled to leave but not casual loading. [7]
Therefore, this decision led to the creation of s 545A of the Fair Work Act, which allows employers to offset identified casual loadings against statutory claims for misclassified permanent employees. [8]
Key Takeaways:
Key takeaways from the case are:
- Misclassifying causal workers leads to incorrect statutory benefits.
- The employment relationship’s nature and work pattern should be considered, beyond just the contract.
- Employers can offset casual loading against statutory claims if they misclassify a permanent employee.[9]
How do you define a casual or full-time employee:
To assist with distinguishing a casual from a full-time employee, a new definition was introduced. Starting August 26, 2024, the new definition of casual employment will apply to all such relationships, regardless of when they began. Under this definition, a casual employee is characterised by:
- No opportunity for a commitment of ongoing and indefinite work.
- Entitlement to casual loading or a specific rate under the Fair Work Act or their contract/enterprise agreement.[10]
Furthermore, the updated definition includes new factors for determining casual status:
- The reality and substance of the employment relationship.
- Contract provisions.
- The employer’s industry.
- Established work patterns.
- Comparison with full-time/part-time roles.
- The employer’s ability to offer work and the employee’s ability to accept.[11]
Casual or Full-Time: The Influence and Impact of the Definition
The new definition takes a broader view of the employment relationship, moving beyond contractual examinations.[12] While casual status was once mainly determined by contract terms, the definition considers the entire employment context—including communications, employer actions, work schedules, entitlements, and business operations.[13] Therefore, businesses must offer clearer contractual terms and work structures aligning with this updated approach.
Conclusion:
WorkPac v Skene underscores needing more accurate employee classification to ensure proper entitlements.[14] The updated casual employment definition requires a broader assessment of the employment relationship beyond the contract.[15] This means businesses must carefully evaluate employees’ work patterns and contractual terms to determine if they are a casual or full-time employee.
This article is not legal advice and serves the purpose of providing generalised legal information regarding the general principles of Employment Law. If you require qualified legal advice, our experienced team of solicitors at Jake McKinley are here to help. Please get in touch with us here to make an enquiry.
[1] See WorkPac Pty Ltd v Skene [2018] FCAFC 131; WorkPac Pty Ltd v Rossato [2021] HCA 23
[2] WorkPac Pty Ltd v Skene (n 1).
[3] Ibid.
[4] Ibid.
[5] Ibid.
[6] Elle Hardy, ‘Commission rules against employer’s double-dipping claim’, Industrial Relations Legal (Blog Post, 12 January 2024) < https://www.hrmonline.com.au/industrial-relations/casual-employee-double-dipping-claim/>.
[7] WorkPac Pty Ltd v Skene (n 2).
[8] Fair Work Act 2009 (Cth) s 545A.
[9] Ibid; WorkPac Pty Ltd v Skene (n 3).
[10] Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 (Cth) s 15A(1).
[11] Ibid sub-s (2).
[12] Ibid.
[13] Ibid.
[14] WorkPac v Skene (n 3).
[15] Fair Work Legislation Amendment (Closing Loopholes No. 2) Act (n 1) s 15A.
