Updated information relating to casual employees

Posted 25 May '20

Updated information relating to casual employees

By Andrea Bradley

Do you employ casuals within your business? Consider what these updates mean for you.

A Full Federal Court ruling in May 2020 has determined that casual employees who work regular hours over a predictable period of time are likely to be considered as permanent employees, irrespective of the fact that the employment arrangement is defined as ‘casual’ and the employee is paid a casual loading under the remuneration arrangements.

In the case of WorkPac Pty Ltd v Rossato it was determined that the employee was entitled to be paid annual leave, personal leave, compassionate leave and public holiday payments on the basis that the employee was, based on the facts, considered to be a permanent employee despite being engaged as a casual employee. This was based on the principles of regular, ongoing and permanent work that was not genuinely ‘casual’ in nature.

Businesses that are pursued based on this case may be at risk of having to pay six years worth of back pay if claims can be substantiated in relation to the permanent, and not casual, nature of the employment.

The decision of WorkPac Pty Ltd v Rossato is likely to be appealed to the High Court however it remains important for employers who engage casual employees on a regular basis to review their employment contracts.  Characteristics that demonstrate a casual employment arrangement include:

• Ad hoc and irregular working hours;
• Payment of a casual loading; and
• Absence of a firm commitment to future work.

Employers need to clearly define casual loading provisions and include the ability to set off the loading payment to maximise the ability to recover payments made to the employee in the event that a casual employee later claims that they were actually a permanent employee. A modernised employment contract can help to reduce the risk to your business of back payments for current and former employees that may have been employed on a casual basis but worked on a more permanent, regular and predictable basis.

We recommend you consider this information in relation to your business. There is more information available on the Fairwork website and the website notes that it will make updates, if required, as a result of this case.  For further information, refer to the following Fairwork casual employees link.