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Casual employees might be entitled to paid annual leave under the National Employment Standards

In a decision with significant implications, the Federal Court has ruled on appeal that some employees paid as casual employees can still qualify for paid leave under the National Employment Standards. Employers should review the employment status of casual employees who work to regular rosters and seek advice about the potential effect of this case.On 17 August 2018, the Full Federal Court ruled in Workpac Ltd vs Skene that an employee who was paid as a casual employee under an enterprise agreement was nevertheless entitled to paid annual leave under the Fair Work Act 2009 (Cth) (“FW Act”).1 In addition to the paid annual leave on termination, the Court determined that the employer will also incur pecuniary penalties for breach of the FW Act.

The entitlements in this case derived from a complex series of specific facts. However, in summary the Court has found that even if an employee is properly categorised and paid as a casual employee under an enterprise agreement or award, the exclusion for a casual employee’s entitlement to paid annual leave in section 86 of the FW Act does not necessarily apply to that employee. Since “casual employee” has no definition in the FW Act, there must be an examination of how the employee works in practice to determine whether in fact they are a casual employee in the ordinary sense, separately from the enterprise agreement definition.

In short, an employee can be paid as a casual under an enterprise agreement – but be regarded as a permanent employee for the purpose of NES entitlements.

In Workpac, the employee was not free to accept or decline work or shifts, but was on a long term, published rotating roster. The facts of the case along with a detailed consideration of Parliament’s intention of ‘casual employee’ at s 86 of the FW Act, resulted in the Court finding the employee was not a casual employee for the purposes of an exemption to the ancillary entitlements under the NES, including annual leave.

The case is complex. There is no word yet on whether there will be a further appeal. If an appeal is made and proceeds we will let you know. Experienced industrial relations practitioners around the country are still closely considering how this affects contracts, payments and management of longer term casual employees, or employees whose work pattern commences as a genuine casual but then evolves to a more regular form of employment.

Employers should review any use of rostered casual employment and seek advice about their specific circumstances. They should also prepare for potential claims from employees and unions for accrued leave for casual employees and seek immediate help if such a claim is made.

Require further information/assistance?If you require further information or advice, please contact your local Consultant at either our Adelaide or Melbourne offices.

NB: EMA will be offering a Networking Session in regards to this topic on Wednesday 12, September 8.30am – 10am.
Please click on the link for more information.

1 [2018] FCAFC 131

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