In the decision of Bambach v WorkPac Pty Limited [2012] FWA 670, Commissioner McDonald found that a period of paid workers compensation leave counted towards service for the purpose of calculating the minimum period of employment.
The Commissioner held that Bambach's unfair dismissal claim could continue. Australian industry Group (AiG) is currently appealing this decision.
If an employee is absent from work and is on paid workers compensation leave – will that period of service count towards "continuous service" for the purposes of satisfying the minimum employment period in order to make an unfair dismissal claim?
Key facts
Bambach was employed by WorkPac Pty Limited (WorkPac) to drive a dump truck in March 2010. Bambach was employed on a casual basis and worked seven days a week on a rotating roster of 12.5 hour shifts. In May 2010 he suffered a workplace injury and made a workers compensation claim which was accepted and remained on workers compensation payments until he was declared fully fit for duty in September 2011.
Once declared fit for duty Bambach requested a new assignment from WorkPac. As WorkPac was not able to place Bambach, it issued him with a separation certificate which stated "unsuitability for this type of work" as the reason for termination.
Bambach lodged an unfair dismissal claim with Fair Work Australia (FWA).
WorkPac objected to Bambach's unfair dismissal application on three grounds:
- Bambach had not been dismissed
- Bambach had not met the "minimum employment period"
- Bambach was a casual employee of the type excluded from the unfair dismissal jurisdiction.
Commissioner McDonald held that Bambach had been dismissed as evidenced by the reasons set out in the separation certificate.
When considering the issue of whether Bambach was protected from unfair dismissal the Commissioner considered section 382 of the Fair Work Act. Section 382 says that a person is protected from unfair dismissal where the person is an employee who has completed a "period of employment" of at least the "minimum employment period". This is only the first element of s382. An employee must also be covered by either a modern award, enterprise agreement, or their annual rate of earnings must be less than A$118,100.
The "minimum employment period" in this case was six months as WorkPac was not a small business.
The "period of employment" is a period of continuous service with the employer. A period of service as a casual employee normally does not count towards the employee's period of service, unless the employment as a casual employee was on a regular and systematic basis, and the employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis.
The Commissioner noted that there are some periods which did not count as "service" for the purposes of the Fair Work Act. Therefore was paid workers compensation leave an unauthorised absence, or a period of unpaid leave or unpaid authorised absence so that it was an "excluded period"? The Commission concluded that Bambach's paid workers compensation leave was an authorised absence and therefore it counted towards calculating his "service".
When considering whether Bambach was a casual employee the Commissioner considered evidence of a rotating seven day roster which showed that Bambach had been engaged on a regular and systematic basis and had reasonable expectation of continuing employment.
The Commissioner concluded that Bambach's period of employment dated from 7 March 2010 until his termination September 2011. Accordingly, Bambach was protected from unfair dismissal.
AiG on behalf of WorkPac and interests of the industry
AiG recently lodged an appeal against this decision citing the wider impact of the decision on its day to day operations. The appeal concerns the meaning of "service" and "continuous service" under the Fair Work Act. AiG's Chief Executive Heather Ridout has openly said "This meaning is critical for determining the entitlements of employees in a wide range of day to day circumstances." This is because these definitions are critical in determining an employee's day to day entitlements such as the accrual of annual leave, the accrual of personal/carer's leave, redundancy pay and unfair dismissal laws. As Ms Ridout said and correctly so, these are issues relevant to all employers and employees.
AiG represents WorkPac in these proceedings and it stated that it also intends to apply to the Full Bench of FWA to intervene in its own right to represent the interests of industry.
What does this mean for employers?
Employers will need to be mindful of employees who are on paid workers compensation absence when determining their continued employment. This is because there is a risk FWA will consider the employee to fall within the "minimum employment period" for the purposes of unfair dismissal and other day to day entitlements. AiG's appeal should be followed closely as it affects not just WorkPac but all employers and employees.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
