CML Lawyers

Casuals can get permanent entitlements.  In a recent case an employer was ordered to pay annual leave for a casual employee.  If the worker looks permanent, the worker probably is. 

If you have casual employees, you may be at risk – read on:

The Federal Court has ordered that a casual employee be paid annual leave. 

“What!”  I hear you cry, “I thought the casual pay rate included a 25% loading for permanent benefits foregone like annual leave and personal (sick) leave?  Surely employees can’t double dip?” 

Well, casuals can have their cake and eat it too, if the recipe doesn’t set out the exact quantities. 

A casual can get a casual loading plus annual leave per the NES on top if their contract or enterprise agreement does not clearly state that the higher rate includes a specific amount for casual loading and other entitlements. 

Mr Skene was described as a casual in his contract, and was paid a flat hourly rate that included “a loading in lieu of leave entitlements”. 

However, Mr Skene worked regularly.  The court found he was not a casual.

Casual is not defined in the Fair Work Act.  The meaning of “casual” comes from the common law (not from awards and enterprise agreements as the employer argued).

The employer argued that the pay loading included an amount for annual leave.  The court disagreed and said that the employer could not “set off” the casual loading against the employee’s annual leave entitlement because the specific amount of the annual leave component was not designated, it was expressed generally. 

As the employee was not to be casual, the employee was entitled to annual leave under the NES. 

The employer might appeal yet.

What should employers do? 

First, employers should check their contracts, their enterprise agreements and applicable awards. What do you look for?  Any extra payments to casual staff that are paid a loading in lieu of entitlements generally (such as an “all in”, “flat rate” or “headline rate”) should be precise – the document must state a dollar amount for each NES component that is included in the rate. 

Second, employers should check if any casual employees in fact work regular hours or shifts, because if so, they might not be casual.

Third, if you find casual employees with general provision for loadings, that work regularly, you should get legal advice about how to fix the problem.

The case is here

WorkPac Pty Ltd v Skene [2018] FCAFC 131)

Contact Peter McNamara to have your employment contracts reviewed.