The COVID-19 pandemic has been an unsettling time for both employers and employees. While employers bear the burden of keeping the business afloat, and their employees employed; employees are concerned about job security and future prospects. Combined, these factors often make for a very stressful work environment, and if the employment relationship ends, bad feelings between a former employee and employer.
It is, therefore, key to ensure that proper processes are followed when terminating an employee's employment, which involves a proper understanding of the nature of the employment relationship. One issue that we have been increasingly dealing with lately is casual employment. When cuts are to be made, often casual employees are the first to go.
Why? Generally, casual employees may be terminated with minimum notice (usually hours or days), and are not entitled to many of the benefits of a permanent employee (including paid annual leave, paid personal / carer's leave, paid public holidays, and redundancy pay).
As you may imagine, if an employee has worked with an employer for a significant period, and has been incorrectly classified as a 'casual' employee (receiving entitlements under that classification) the employee may have missed out on a significant number of entitlements.
What can an employee do?
If the employer and employee dispute the nature of the employment relationship (and entitlements), an employee may make a claim for such entitlements under the National Employment Standards, a workplace award or registered agreement, or their contract of employment. The source and amount of the relevant entitlements will dictate the type of claim an employee may make.
What is casual employment?
Very generally, a casual employment relationship is one in which there is:
- no advance firm commitment of work from an employer, including as to how long the employee will be offered work and the hours or days they will be working; and
- no commitment from an employee that the employee will accept all work offered by an employer.
A court will look at the individual circumstances of each case and not simply what is written in an employment contract.
Some recent high-profile court decisions have drawn a lot of attention to this issue. In May 2020, a decision was given in the Federal Court in WorkPac Pty Ltd v Rossato  FCAFC 84 (Rossato), confirming an earlier decision (in WorkPac v Skene  FCAFC 131 (Skeen)) that employees who have stable, regular or predictable employment arrangements, where there is an indefinite period of engagement or advance commitment of work, will generally accrue permanent entitlements under the Fair Work Act 2009 or relevant award or agreement.
What attracted a lot of attention about the Rossato decision was the position the Court took in allowing Mr Rossato to 'double-dip': he received a casual loading during his employment (which is provided to casual employees in lieu of the benefits of permanent employment) which could not be set off from the amount of his claim for unpaid entitlements.
It is important to note that, while Workpac did not seek to appeal the Skeen decision, special leave is being sought to appeal Rossato in the High Court.
What to do?
With millions of Australian employees employed on a 'casual' basis, this is a significant issue for Australian workplaces. From our recent experience, employees appear to be less willing to accept classification as a 'casual' simply because that is what they have been told by their employer.
It is important that employers fully consider the nature of the employment relationship when engaging new 'casual' employees, and regularly review current casual employee arrangements. Given the Rossato decision, there may be limited benefits to engaging an employee on a casual basis. If an employer wants to create a genuine 'casual' employment relationship, the employment offered should be irregular and uncertain.
As an employee, the matter may be initially dealt with by requesting to be engaged on a permanent basis, or seeking payment of entitlements you believe should have been paid.
A casual employee can change to permanent employment at any time by agreement. Some awards require employers to notify a casual employee that they can elect to covert to permanent employment after a set period (usually 6 to 12 months of regular and systematic employment). An employer can only refuse a casual conversion request, pursuant to an award, on reasonable grounds and after consultation with the employee.
If you cannot resolve your dispute satisfactorily with your employer, or your employment relationship has ended, you may wish to consider whether to commence a claim for unpaid entitlements. Given that every situation is unique, if in doubt, we recommend seeking advice in relation to this issue and or a review of your employment practices.
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.