casual employee; small business

The Fair Work Regulations 2009 (Cth) (Regulations) have recently been amended to help employers to address any ‘double dipping’ that may arise in response to the recent decision handed down by the Full Court of the Federal Court in WorkPac Pty Ltd v Skene.

The WorkPac decision concerned Mr Skene, a casual employee, who was employed by labour hire company WorkPac to perform work at a Rio Tinto mine site in Queensland.

After being dismissed for misconduct, Mr Skene lodged a claim stating that during the course of his employment he had been a “permanent full-time employee of WorkPac” and as such had an entitlement to annual leave, or payment in lieu of annual leave, upon the termination of his employment. Conversely, WorkPac contended that Mr Skene had been a casual employee with no entitlement in respect of annual leave.

Unfortunately for employers – the Full Court ruled in favour of Mr Skene and held that for the purpose of the National Employment Standards (NES) an employee who works on a predictable and regular basis over an extended period is not a casual. Consequently, WorkPac was then ordered to compensate Mr Skene for its failure to meet his NES entitlement in respect of annual leave; they also received a small financial penalty for contravening s. 44(1) of the Fair Work Act 2009 (Cth).

Following the WorkPac decision, there has been (unsurprisingly) significant concern expressed by employers regarding the possibility of large claims from longer term casual employees regarding unpaid entitlements (i.e. on the basis of being incorrectly classified as a casual employee).

As outlined above, the Regulations have, in response to the Workpac decision, subsequently been amended and now provide that where an employer pays a ‘clearly identified’ casual loading to a casual employee, that amount can be taken into account when calculating the amount(s) owed by an employer to an employee incorrectly classified as a casual (i.e. in respect of one or more relevant NES entitlements).

If your business employs casual workers, you may wish to consider seeking professional advice to understand any exposure that you may have and to understand the best way to protect your business from such claims.

Heelan & Co. Industrial Relations and Management is a consulting firm specialising in providing industrial relations and management services for employers. Heelan & Co. can be contacted on (08) 9204 7777.