In brief - Employers should continue to manage their risk around casual employees

In a departure from the controversial precedent set by WorkPac Pty Ltd v Skene [2018] FCAFC 131, the Federal Court has found that an employee working 40 hours most weeks pursuant to an employment contract referring to his employment status ambiguously as “casual full time” was a genuine casual employee and not permanent. In reaching its conclusions, the Court had regard to the “conduct of the parties to the employment relationship”; and “the real substance, practical reality and true nature of that relationship”. 

Decision departs from WorkPac 

In Birner v Aircraft Turnaround Engineering Pty Ltd [2019] FCA 1085, Justice Collier found that the following findings relating to the employee’s working arrangements were “not disturbed by the Full Court authority of Skene”: 

  • The parties agreed the employee would be paid at the rate of $45.00 per hour
  • Payroll and record keeping was done on the understanding the employee was a casual employee
  • The hours available to the employee were set out in a roster available to him one month at a time, and seven or so days in advance
  • The employee was at liberty to reject rostered shifts
  • There was no requirement to complete a leave application form
  • The employee on at least two occasions chose not to work rostered shifts
  • The employee’s roster changed, and became more variable, after he suffered a workplace injury 
  • The employee’s shifts were sometimes seven hours, and other times nine hours in duration
  • The employee was, on occasion, rostered to work for fewer than 40 hours in a given week, and never more than 40 hours per week
  • The absence of specific reference to a casual loading is not, by itself, determinative that the employment relationship was not casual 

Implications of Birner decision

The Birner case does not overrule the decision in Skene. Further clarity in this area of the law will not be forthcoming until Justices Bromberg, White and Wheelahan of the Full Court of the Federal Court deliver judgment in another case relating to similar legal contentions, in WorkPac Pty Ltd v Robert Rossato (QUD724/2018). Even at this point, a High Court challenge by the unsuccessful party can be expected. 

Risk mitigation tips for employers with casual employees 

Until legal clarity occurs, employers are strongly encouraged to undertake the following risk mitigation steps: 

  1. Regularly review casual engagements within the workforce to identify patterns that may suggest permanent employment. Obtain advice about converting those employees to permanent employment arrangements.

  2. Review employment contracts and payslips to ensure casual loading amounts are separately identifiable and that contracts have effective off-set clauses. 

  3. Educate managers, HR and payroll to ensure there is an understanding of how and when a casual employee may merge into a permanent employee so that the nature of the relationship can be managed. 

  4. Ensure casual arrangements reflect (at least) the types of distinguishing characteristics that were present in the Birner decision, such as variable rosters, no requirements to apply for leave and an ability to reject shifts. 

This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2019.

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