Employers quite often engage casual employees because of the apparent ease of the arrangement. However, is this arrangement always to the employer's advantage? For example, does a period of casual employment count for the purposes of determining whether an employee has a right to bring a statutory unfair dismissal claim against their employer?
In addition, when is a worker an independent contractor and when are they are an employee? Should those engaging workers be concerned with this issue?
These matters were recently dealt with by the Fair Work Commission in the matter of Cole.
The worker's employment was terminated by the employer with effect on 27 May 2016. He was employed in the position of IT and Operations Manager with the employer on 13 July 2015.
However, before commencing employment in that position, the worker was engaged by the employer between the period of 30 March 2015 and up until the commencement of his latter engagement. Although the employer maintained that the worker was engaged as an independent contractor during this earlier period of engagement, the worker claimed that he had actually been engaged as a casual employee.
In support of this argument, the worker claimed, among other things that he:
- worked regularly;
- was provided with a desk and a desk phone by the employer;
- was provided with a work email address by the employer; and
- was introduced as the employer's "IT person".
The worker argued that the length of both periods of "employment" added together meant that he had been engaged with the employer for more than 12 months, noting that the employer was a "small business employer".
[In general terms, if an employer has fewer than 15 employees, its employees cannot bring unfair dismissal claims against it under the Fair Work Act 2009 (Cth) (Fair Work Act) (assuming that they meet the other jurisdictional criteria) within the first 12 months of their employment.]
In this case, the worker claimed that he had therefore served the relevant "minimum employment period" and as such was able to bring a statutory unfair dismissal claim against the employer, with respect to the termination of his employment.
It was relevantly held that casual employment is counted towards assessing "continuous service" for the purposes of calculating the minimum employment period, if it was regular and systematic and the employee had a reasonable expectation of that regular and systematic employment continuing in that way.
While evidence was given that the worker had provided services to the employer prior to 30 March 2015 as an independent contractor, the worker claimed that it was agreed he would be engaged as a casual employee from 30 March 2015. The worker claimed that this arrangement was entered into because at that time the worker had been engaged part-time with a government bureau, and he and the employer agreed that the worker would be offered permanent, full-time employment once that part-time employment ended.
After assessing all of the evidence, Deputy President Gostencnik found:
"All of these matters point to an employment relationship (in relation to the period the worker claimed constituted casual employment). There is little by way of credible evidence pointing the other way. In my view, (the worker) was during the relevant period a casual employee of (the employer) and he was not an independent contractor".
The Deputy President also found that the employee worked as a casual employee on a regular and systematic basis, and that he had a reasonable expectation of continuing employment in that way. In this regard, the Deputy President found:
"I accept (the worker's) evidence to the effect that the arrangement into which he entered was that he would continue the casual employment with (the employer) until such time as he was ready to commence full-time employment with (the employer)".
It was held that the employee had served the minimum employment period when his casual employment was counted with his full-time permanent employment, meaning that he was entitled to bring an unfair dismissal claim against the employer.
Employers need to exercise care in their engagement of casual employees. While there are advantages in engaging employees as casuals, particularly when they are required to work on an ad hoc basis, if the employment is to last for a reasonable period of time, it could provide certain rights and entitlements to the worker in question.
In this case, it was held that a relevant period of casual service counted towards the minimum employment period, enabling the worker to access the statutory unfair dismissal jurisdiction. Some Modern Awards also provide that a worker can elect to take on permanent employment after they have been engaged for a relevant period of time on a casual basis in certain circumstances.
This decision also examined the issue of whether a worker is an employee or an independent contractor. When independent contractor arrangements are entered into, employers need to take care that the arrangements they are proposing are not merely employment arrangements described as something else. To do otherwise may not only lead to employers being required to back-pay entitlements, but can also lead to civil penalties being awarded against them for breaches of the Fair Work Act.
Employers should consider seeking appropriate advice in these circumstances.
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.