Christmas casuals: a guide for employers
During the festive season, many businesses employ additional casual staff to help manage the increase in customers, sales and the extended retail trading hours. It is important for employers to be aware of their obligations to casual staff, for example to ensure casuals are provided with a minimum number of hours work in any engagement, and minimum rates of pay including their casual loading. It is also necessary to mitigate any risk that a casual employee may later be able to mount legal claims to permanent employee entitlements.
RECENT CASUAL EMPLOYMENT CASES TO CONSIDER
In the 2018 decision Workpac v Skene, although Mr Skene was formally employed as a casual employee, he successfully argued that he had an entitlement to annual leave because he was in actuality a permanent employee. This was shown by the facts that he had worked as a dump truck operator at a coal mine on regular 12-hour shifts, on a 'seven days off, seven days on' continuous and regular roster over a period of four years; his rosters were set 12 months in advance. The Full Bench found that the essence of a casual employment relationship to be '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.' The fact that Mr Skene was paid a higher rate of pay and was labelled a casual employee was not sufficient to negate the regular, systematic and ongoing nature of his employment. Mr Skene was found to have been misclassified as a casual employee when he was, in reality, a permanent employee. Workpac was ordered to pay annual leave entitlements that he did not receive over the course of his employment.
Following the decision in Workpac v Skene, the Federal Government introduced a new regulation to the Fair Work Regulations 2009 (Cth) that sought to clarify the offsetting of leave entitlements in casual loading. MDC Legal has prepared a detailed explanation of this new regulation which is available here. The regulation has attracted criticism by at least one leading industrial relations academic, Andrew Stewart, as being 'worse than useless'.
Several other high-profile cases have surfaced over the underpayment and misclassification of casuals in 2018 and 2019, including:
- another case against Workpac by employee Mr Rossato who was classified as a casual and is seeking annual leave entitlements over the course of his employment. Workpac is seeking declarations from the Full Federal Court that Mr Rossato was a casual and is therefore not owed any annual leave entitlements and that Workpac is entitled to offset casual loading payment made to Mr Rossato against any leave entitlement that he may be found to have.
- a test case against a Christmas pop-up toy store where the Fair Work Ombudsman is seeking to reverse the onus of proof for the underpayment of Christmas casuals and seek civil pecuniary penalties for serious contraventions against the company and its directors which are a maximum of $630,000 (for the company) and $126,000 (for the directors) per contravention;1 and
- two class actions lodged by Adero Law and the Construction, Forestry, Maritime, Mining and Energy Union claiming $84 million and at least $12 million (respectively) in unpaid annual leave payments for thousands of coal miners allegedly misclassified as casual employees.
In light of these cases, employers should be vigilant when hiring casual employees, particularly where their employment may continue after festive season and into the new year for the long term on a regular basis.
MODERN AWARD: NEW RIGHT TO REQUEST CONVERSION
In late 2018, a casual conversion clause was inserted into over 80 modern awards giving casual employees who have worked a pattern of hours on an ongoing basis for 12 months have the right to elect to be converted to full-time or part-time employment. Employers who are covered by a modern award with a casual conversion clause are required to give the employee notice of the casual conversion clause within 4 weeks of the employee having obtained 12 months of regular ongoing work.
HOW TO: HIRING CHRISTMAS CASUALS
- When creating casual positions consider whether the role has irregularity, unpredictability, uncertainty, discontinuity and intermittency in the pattern and nature of work. If it is a regular and ongoing role into the long term, it is probably not suited to a casual engagement.
- Clearly state in the employment contract that:
- the nature of the employment is casual and irregular;
- the casual loading is compensation for the employee in lieu of any leave entitlements;
- the employee will not have regular fixed hours and will be advised of shifts on an as needed basis; and
- there is no promise of ongoing work.
- Comply with your obligations as an employer regarding pay, penalty rates, overtime and any additional loadings in accordance with the casual employment contract, enterprise agreement and/or modern award.
- If you intend to retain a Christmas casual on a regular, systematic and ongoing basis into the new year, transition the employee to a permanent part-time or full-time role and offer a new contract of employment.
There is little risk in cases of short-term engagement over the busy festive season, but care needs to be exercised where that employment continues into the longer term. MDC Legal are employment law specialists assisting employees, employers and industrial organisations – giving us a unique comprehensive insight into employment law issues. We provide expert solutions through high quality, cost effective legal services.
1 IE Enterprises Pty Ltd v Eyal Israel (MLG1560/2019)
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.