The Essence of Casualness

18th September 2018

Casual employment is a convenient and flexible form of employment, or so we thought. A recent Federal court decision awarding annual leave to a supposedly casual Queensland ‘fly in, fly out’ worker underlies the difficulty for employers deciding when, where and how casual employment can be used.

Meaning of casual

We know a casual loading of 25% is normally paid in lieu of conditions provided in the National Employment Standards, modern awards and enterprise agreements such as annual leave, personal/carers leave and redundancy payments. However, paying the loading and naming an employee casual is not the end of the story. The absence of a firm advance commitment by employer and employee distinguishes casual from either full-time or part-time employment.

As the good judges of the Federal court in Workpac v Skene 2018 said, ‘… “the essence of casualness” being (from the perspective of the employee) the absence of a firm advance obligation to provide ongoing work and therefore a capacity for the employee to have access to rest and recreation. In other words, employees who have no ongoing obligation to provide their services have the capacity to take a break from work and need not be guaranteed annual leave.

The pattern of employment that eventuates may in the circumstances become regular and long-term, but the employee may continue to be correctly characterised as casual as long as that commitment to ongoing employment remains absent from the employment relationship.

How does this operate in practice?

The Federal court provided two examples to illustrate its point. The first being a relief teacher engaged at a school initially to cover absences of another teacher on leave, which subsequently extended to further similar engagements over a continuous period of 12 months. The work was not irregular but the essential casual character of the employment did not change.

So too the example of a research officer at a university employed to perform work funded by a grant and then moving from one project to the next but being regularly employed for over 12 months. Unpredictability as to the availability of further work for the researcher meant that at no point in the 12 month period was an advance mutual commitment to ongoing employment on an agreed pattern of work a characteristic of the employment. Despite the regularity of the employment, the researcher remained a casual employee over that period.

Casual service and redundancy

Casuals are excluded from redundancy payments under the NES and as the Fair Work Commission recently decided in Unilever Australia v AMWU 2018, contiguous periods of casual service are not included for the purpose of calculating continuous service when determining entitlements to redundancy payments.

“In relation to casuals, the common law position is that each engagement stands alone. Each engagement constitutes a period of service, but there is no continuity of service from one engagement to the next. Such is the case also with seasonal workers, who render service for each season they are engaged, but ordinarily do not have continuity of service from one season to the next. The common law position can of course be altered by statute, contract, or an industrial instrument.”

Conclusions

Making it clear at the outset, preferably in a written employment contract, neither the employee or employer has any expectation of ongoing employment beyond the agreed casual arrangement is the first and important lesson. Where circumstances change the essential casualness then it is time to change to something other than casual.

The second lesson is to consider the particular condition, right and obligation in context. As the Commission stated in the redundancy case above, the concept of regular and systematic casual employment is a statutory construct used for the unfair dismissal provisions of the Fair Work Act and not reflected in the meaning of service or continuous service under s 22 of the Act. Similarly, casual service to qualify for long service leave and parental leave is also subject to specific and separate statutory arrangements.

Finally, the variance in the treatment of casual service suggests employers may need to take a more strategic approach to the employment of casuals. The cost may in many instances outweigh the increasingly illusory flexibility associated with casual employment.