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Is a casual employee really casual?

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By Chao Ni, Associate, MST Lawyers

Introduction

In the 2010 case of Williams v MacMahon Mining Services Pty Ltd [1], the Federal Court considered the substantive reality of a fly-in-fly-out casual mining employee to determine that the employee was in fact a permanent employee based on the following considerations:

  • the employee was expected to be available for his rostered hours on an ongoing basis;
  • the employee had a regular and consistent roster;
  • both the employee and employer had an expectation of continuing employment; and
  • travel arrangements were organised by the employer.

The conclusion reached by the Federal Court was that the employee was entitled to full time benefits despite being engaged as a casual employee.

Telum’s Case

The recent Fair Work Commission (“FWC”) decision of Telum Civil (Qld) Pty Limited v CFMEU [2] (“Telum’s Case”) highlights the importance of enterprise agreements in removing uncertainty over the classification of casual employment.

In Telum’s Case, the employer engaged a group of construction employees on a casual basis to work on a project.  After the employer terminated casual employment, the employees made a claim for redundancy entitlements on the basis that:

  • the employees worked the equivalent of full-time hours;
  • the employees worked regular hours that were not subject to variation;
  • the employees had consistent starting and finishing times; and
  • there was an expectation that the employee would work specific hours.

Given that redundancy pay entitlements under the Fair Work Act 2009 are not payable to casual employees, the employees mounted an argument that they were permanent employees in accordance with the principles set by theWilliams v MacMahon Mining Services Pty Ltd decision.

Importantly in Telum’s Case, the employer’s enterprise agreement provided that:

  • an employee may either be engaged as a permanent or casual employee;  and
  • a casual loading will be paid in lieu of and compensate for all benefits such as leave, notice, redundancy and any other full time entitlements that do not apply to casual employees.

Initial Decision

Commissioner Booth of the FWC held that the casual employees were entitled to redundancy pay, having regard to, among other considerations, the employees’ regular hours of work and expectation of continuing work.

Appeal Decision

On appeal, the Full Bench of the FWC overturned Commissioner Booth’s initial decision.

The full bench took the view that the classification of workers should be made in accordance with the definitions given in the applicable federal industrial instruments, such as an enterprise agreement or modern award, rather than under the common law.

Given the clarity of Telum’s enterprise agreement regarding the casual employees, the Full Bench concluded that the casual employees were not entitled to redundancy pay.  The Full Bench commented that if Commissioner Booth’s decision was upheld, it would hinder productivity and flexibility by allowing casual employees to “double dip” and receiving both the casual loading and permanent employment entitlements.

Implications for Employers

Enterprise agreements, if properly drafted, can protect employers against the type of claims seen in Telum’s Case.  All businesses that employ casual staff can benefit from an enterprise agreement regardless of their industry or size.

If you wish to speak to someone about the status of your casual employees or enterprise agreements, please contact MST Lawyers Workplace Relations team on (03) 8540 0200.


[1] (2010) 201 IR 123.

[2] [2013] FWCFB 2434.