Aitken Legal Senior Associate Nikolina Palasrinne continues her series on the current hot topic in employment law: The latest employment law changes and how they apply to managing casual employees in schools. Below is Part 2 which covers recent cases that deal with the question of whether someone is truly a casual employee at law, and what this means for schools. Read Part 1 here. Nikolina presented a seminar on this topic at a previous School Law Summit.
Introduction
Broadly speaking, a casual employee is a person engaged to perform work for an employer on an as needed basis. They are paid by the hour with no guarantee as to ongoing employment. Casual employment is a series of individual engagements, whether it be week to week, day to day, shift to shift, hour to hour, or for any other agreed short period. However, one should not assume that an employee is a casual based on this definition alone – particularly given the flurry of legal activity that occurred in the latter half of 2018.
Recent cases – casual or not casual, that is the question
In addition to the introduction of casual conversion obligations, the casual employment landscape was further impacted in the latter half of 2018 by the Federal Court’s decision of Workpac v Skene [2018] FCAFC 131 (‘Skene Decision’).
In the Skene Decision, a mine worker who was employed as a casual by a labour hire company over a period of 20 months, was found to be a permanent employee. He was a fly-in-fly-out worker which meant that his roster was generally always the same – one week on one week off, working 12.5 hours per shift. His employment was subsequently terminated and because he was a casual, he did not receive any accrued annual leave payment on termination. Skene made a claim for unpaid annual leave entitlements, despite the fact that he had agreed to an offer of casual employment and consistently received the benefit of the casual loading.
The Court found that, despite the parties’ agreement to engage in casual employment and despite Skene having received payment of the casual loading, the objective circumstances showed an expectation by both parties of continuing employment. Specifically, there was an expectation that Skene would be available, on an ongoing basis, to perform the duties required of him in accordance with his roster.[1]
The engagement lacked the essence of casualness that one would expect in a true casual arrangement. The Court held that the ‘essence of casualness’ will only be found to exist where there is an absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work.[2]
Skene was found to be a permanent employee, and thus entitled to backpay of National Employment Standard (NES) entitlements, including annual leave.
The Skene Decision sparked incredible interest, with unions heralding the decision as a win for ‘permanent casuals’ while employer associations raised strong concerns about the potential ability for employees to double-dip and receive the benefit of both the casual loading and permanent entitlements in the NES (such as annual leave and personal/carer’s leave).
To put it in context, the Skene Decision could mean that schools who employ casuals and pay them the casual loading in the applicable Modern Award[3], could also be liable to provide them with the paid leave entitlements in the NES that permanent employees receive, such as annual leave and personal/carers leave. This is generally relevant to circumstances where both parties have an expectation of continuing employment with an agreed pattern of ordinary hours of work.
However, the Court specifically noted that the use of casual relief teachers in secondary schools would likely be an example of where the arrangement is truly casual. The Court said at [174]:
A relief teacher is employed by a secondary school to relieve a teacher ill with the flu. She is employed for 10 consecutive school days. On the ninth day she is asked to relieve a teacher taking two months long service leave. That takes her employment through to the end of the school term. A few days into the new term, the relief teacher relieves for another teacher who has unexpectedly been dismissed and works for a month until a replacement for the dismissed teacher is found. And so the pattern continues for 12 months. Whilst irregularity was not a feature of the employment, at no time during the 12 month period was the teacher other than in casual employment because at no time was there a firm advance mutual commitment to on-going employment on an agreed pattern of ordinary hours of work. It just happened that the teacher’s work turned out to be regular.
The Skene Decision resulted in Workpac (the labour hire company) commencing further proceedings in respect of another casual employee (Rossato).[4] Workpac is seeking declarations that Rossato was in fact a casual employee and in the alternative, if he was found to be a permanent employee, then Workpac should be able to offset any paid leave entitlements against the casual loading already paid – i.e. to address the double-dipping issue. Whilst the hearing has been set for early May 2019, a decision may not be delivered until later in the year, meaning that a lot of uncertainty remains for employers who have casual employees, particularly those working regular and systematic hours with an expectation of this being ongoing. Schools who employ casual employees will need to keep an ear out for the outcome of the Rossato case, because it could have significant and far-reaching consequences.
But wait, there’s more! Enter the Fair Work Amendment (Casual Loading offset) Regulations 2018
In response to the upheaval that followed the Skene Decision, in December 2018 the Federal Government introduced a new Fair Work Regulation to clarify that employers, in certain circumstances, may apply for an employee’s casual loading payments to be offset against any NES entitlements where the employee is determined to be a permanent employee. The Fair Work Amendment (Casual Loading Offset) Regulation 2018 (‘Regulation’) came into effect on 18 December 2018.
However, there are restrictions as to when the Regulation can be used and it is still ultimately up to the court to decide whether to apply an offset and if so, the amount of that offset.
Further to this, in mid-February 2019, Labour proposed a motion to disallow the Regulation. The motion was not resolved before the Parliament dissolved and it will be an issue to be determined after the coming Federal election. Consequently, as it stands it is too early to tell whether the Regulation will be of any benefit to employers who have a casual workforce.
As a result, it is advisable that Schools be proactive and seek employment law advice to properly identify the specific risks that using casual employees poses within their workplace.
Nikolina Palasrinne is a Senior Associate at Aitken Legal, a boutique firm specialising in employment law for employers. She has been practising in the area of employment law since 2011. She previously worked as a Senior Associate at Adams Wilson Lawyers, where she represented both employers and employees. This experience has provided her with a holistic understanding of the complex world of employment law and the vital steps that employers must take to ensure adequate protection for their business. She has advised individuals, corporations, associations and non-for-profit organisations on all thing’s employment law throughout Australia. Nikolina frequently presents to school administrators, school counsellors and teachers on relevant employment law obligations. Contact Nikolina at nikolina.palasrinne@aitkenlegal.com.au or connect via LinkedIn
[1] Workpac v Skene [2018] FCAFC 131 [at 33].
[2] Ibid [172, 173].
[3] Which is 25% in the General Staff Award.
[4] Workpac Pty Ltd v Robert Rosatto (QUD724/2018).