19 Aug FULL FEDERAL COURT UPHELD CASUAL WORKER ENTITLED TO ANNUAL LEAVE
In 2016, the Federal Circuit Court found the subject truck driver who was employed at a mine under a labour hire arrangement as a casual was not a casual within the meaning of section 86 of the Fair Work Act 2009 (“the Act”) because of his regular and continuous pattern of work. Accordingly, it held the truck driver was entitled to paid leave benefits under the Act.
The truck driver was employed for three and a half years and paid by the hour. His fly in, fly out working arrangements and shifts were set 12 months in advance in accordance with a stable and organised roster. The Federal Circuit Court said it was apparent that the truck driver was expected to be available on an ongoing basis which was “inconsistent with the notion that he [sic] could elect to work on any day and not work for others without first making arrangements with the mine”.
On appeal to the Federal Court of Australia (“Federal Court”), the Federal Court said that the truck driver’s employment contract did not characterise him as a casual nor was it clear that his “all in all” flat rate included a casual loading. The judgment focused on the essence of the truck driver’s engagement and applied an earlier judgment’s interpretation of casualness. That is, casualness is in essence “the absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work”.
Although the Federal Court agreed that if the applicable enterprise agreement defined or described the truck driver as a casual employee for the purposes of section 86 of the Act, “that fact would have been a relevant factor to be taken into account just as a designation in a contract would be a relevant factor”. However, the Federal Court said it was not a relevant factor in this case because the agreement did not define the truck driver as a casual employee.
The labour hire company also contended that the truck driver was paid by the hour which was a relevant factor in favour of casual employment. The Federal Court rejected this contention on the basis of an earlier finding that found “engagement at an hourly rate is not a criterion of casual employment as distinct from regular employment”.
Possible implications for employers
Employers and labour hire peak bodies are warning that the judgment is a major cause for concern, stating that it risks providing workers with entitlements both as a casual and as a permanent employee – effectively “double dipping”. The view is that these entitlements should be mutually exclusive.
Given the wide potential implications of this decision, an appeal to the High Court is a strong possibility. It will be interesting to see whether legislators take heed of the call by both employer associations and unions for the Act to be amended with a defined definition as to casual employment. In the meantime, proactive employers may wish to undertake an assessment on their potential exposure to minimise the risk of possible liability to back claims in addition to ongoing exposure.
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