The National Employment Standards (NES)
contained in the Fair Work Act 2009 (Cth) (FW Act) provide
minimum entitlements to notice periods and redundancy pay based on
an employee's service.
The Act defines a period of service as a period during which the
employee is employed by the employer, but does not include:
any period of unauthorised absence
any period of unpaid leave or unpaid authorised absence (except
community service leave or stand down).
In a recent decision (AMWU v Donau Pty Ltd - 
FWCFB 3075), the Fair Work Commission (FWC) considered whether a
period of regular and systematic casual employment counts as
service for the purposes of notice of termination and redundancy
A number of permanent employees in a shipyard being retrenched
had prior contiguous periods of service as casuals, working on a
regular and systematic basis, with no break between the casual and
permanent periods of service. During their casual employment these
employees received a 25% casual loading. The question was whether
this prior casual employment was to be counted with the period of
permanent employment when calculating redundancy pay and notice
A casual employee does not have any entitlement to redundancy
pay or notice. The FWC noted that industrial justice might suggest
it is unfair for an employee who has received a casual loading for
a period of employment to have that period of employment also count
towards the accrual of severance payments.
However the FWC noted that a period of service by a regular and
systematic casual employee is not identified as one of the
exclusions from a period of service or continuous service in the FW
Therefore, according to the FWC, a period of continuous service
as defined by the FW Act includes a period of regular and
systematic casual employment.
Implications for employers
This ruling is highly contentious and likely to be appealed to a
Court by employer groups. The Full Bench who issued the ruling was
split 2-1. Some of the difficult consequences flowing from the
decision were identified by Commissioner Cambridge in his
dissenting decision as a member of the Full Bench.
For instance, the ruling was based on agreement between the
parties that the prior casual employment was regular and systematic
basis, with no break between the casual and permanent periods of
service. However what if the casual employment was irregular?
Following this decision, it is arguable irregular service would
still need to be counted so long as the irregularity was authorised
by the employer. The prior service might include irregular casual
service or regular casual employment of, say, one day a week.
Furthermore, if service includes prior casual service for the
purposes of redundancy pay and notice, then it will also count
towards for annual leave and personal/carer's leave. A casual
employee who became a permanent would instantly have paid leave
accrual based on the date of commencement as a casual.
There is a 12 month service prerequisite for an employee to have
the right to request flexible working arrangements or to take
unpaid parental leave. If the employee is a casual on the day of
making the request for the flexible working arrangement or the date
of birth, or the expected date of birth, the employee needs to have
at least 12 months of regular and systematic casual employment to
access these entitlements. However if they become a permanent
employee the day before the day of making the request or the birth,
then based on the above FWC ruling any prior contiguous casual
service counts towards the qualifying period - regardless of
This publication does not deal with every important topic or
change in law and is not intended to be relied upon as a substitute
for legal or other advice that may be relevant to the reader's
specific circumstances. If you have found this publication of
interest and would like to know more or wish to obtain legal advice
relevant to your circumstances please contact one of the named
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An employee that refused a reasonable offer of settlement was ordered by the FWC to pay his ex-employer's legal costs.
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