HOW “CASUAL” IS THIS?
Over the recent past there has been debate and controversy in respect of casual employment.
By Ron Gorick, Partner
Casual employment is not uncommon. In many instances, casual employment suits both parties to the arrangement. While a casual employee does not have “security of tenure” the employee is to be paid the required casual loading, which is, commonly, 25%. For an employer, a casual employee does not attract full-time or part-time entitlements for carer’s leave, annual holidays, public holidays, redundancy and other entitlements.
To employ a casual employee, the employer must inform the casual that they are employed as a casual. It is not uncommon in many Modern Awards for there to be provisions in respect of casual employment. Until around 2018, while there was some agitation as to whether employees employed as casuals were really “casual” employees or not, the situation changed arising out of the Full Federal Court decision in the matter of Workpac v Skene.
The Court in Workpac v Skene indicated that a “casual” employee may not, in substance, really be a “casual” employee, if the nature of the employment lacks the “essence of casualness”.
The “essence of casualness” means the arrangement must be categorised by the absence of any firm advance commitment to continuing indefinite work on an agreed pattern of regular hours and days etc and that a casual employee does not have the reciprocal commitment to that arrangement.
If the substance of the arrangement is that there is no “essence of casualness” then the arrangement between the parties may be a part-time or full-time employment arrangement. Upon that basis, the employee would be entitled to annual leave, personal leave, redundancy etc.
The Workpac v Skene case as also interesting in that while the Court held that the employee was really a full-time employee and entitled to annual leave, the annual leave was calculated on the wage/salary paid to the employee which included the casual loading of 25%. In effect, the employee received the 25% casual loading yet received annual leave based upon his wages/salary which included that component.
That was seen as “double dipping” as the casual loading was paid, in effect, to compensate the employee for not being entitled to such entitlements as annual leave.
Quite understandably, there was an uproar in respect of that aspect. The Commonwealth Government reacted by introducing Regulation 2.03A to the Fair Work Regulations 2009. This Regulation allows, where a casual employee was employed and paid the casual loading but where, in substance, the employee was not a casual employee for the purposes of the National Employment Standards and that employee makes a claim under the National Employment Standards for entitlements such as annual leave, redundancy pay etc, then the employer, if such payments are to be made, must make the payments upon the basis as if the casual loading was not paid.
For employers to take advantage of this provision, the casual loading must be “clearly identifiable”. For those purposes, it is advisable that any casual loading be clearly identified on any payslips provided to any such employee. The regulation applies to employment before or after the date the regulation was enacted.
All employers should review and consider the engagement of casual employees. This area is currently the subject of much agitation. All employers should consider whether, in effect, their “casual” employees are really “casual” employees and, if not, there may be a potential liability for those employees to make claims for entitlements as if they were either full-time or part-time employees. In addition, employees should clearly identify the loading paid to casual employees on their pay slips in order to take advantage of the potential offset arising out of amendments to the Fair Work Regulations, if the employee makes a claim for annual leave and the like.