Introduction & Background

Labour hire firm Workpac is again in the news in relation to the employment of casual workers, You may recall the Skene decision which the Federal Court deemed that, what Workpac had thought to be a casual employee (Mr Skene), the court ruled that Mr Skene was not a casual.

The feral government were quick to act, implementing a provision in the Fair Work Regulations 2009, to the effect that if you put the wording in an industrial instrument (ie contract, award. EBA), that states that clearly states that the 25% loading is paid instead of leave, etc, then this nullified the Skene decision.

However, last week (20 May 2020) a Full Bench of the Federal Court handed down yet another decision relating to casual employment. Only this time Workpac itself was the progenitor in asking the Court seeking a declaration by the Court that casual employees receiving a casual loading not be entitled to leave payments. This case “used” Mr Rossato, as an example, who like Mr Skene, was on-hired by Workpac to various mine sites.

Summary of Federal Court decision

In summary, all three judges concluded that Mr Rossato was not a casual employee and was there for entitled to leave. In this 272-page judgement, the fact that (as in Skene) there was no actual legal definition of a casual employee other than they are neither a full-time nor part-time employee. Therefore, relying on past case law (precedents), and settling on the term “firm advance commitment” made Mr Rossato and Mr Skene both not casuals.

But most instructional to employers, should be the decision means that just you call someone a casual, does not mean that they are. In my words: “if it has feathers and quacks, it’s a duck”.

So how do we fix the problem?

Through the annuls of industrial relations law, everybody new what a casual employee was, right? Not so, since the expansion of what was once known as being a “temp” (temporary employee), there has been a huge spike in the number of so-called labour hire firms spring into the employment market. Great! Say the employers, which could now grab labour if and when they need it. No pesky paperwork or dealing with poor performance, just labour to do a job.

This in turn has led to, what the unions call, the “casualisation of the Australian workforce”. That is, we now have large tranches of workers who have zero job security. This has been illustrated very clearly with the Jobkeeper payment replicating the unfair dismissal laws of a casual employee only eligible (in this case) JobKeeper payments if they have worked regularly and systematically for an employer for more than 12 months.

My belief is that casual employment should be limited in scope and be the last option of employment. For workers, casual employment should be the icing on the cake, not the whole cake. That is, to supplement a low paying job, as was taxi driving years ago.

Just change the law, right?

Well yes and no.

With the Skene and Rossato decisions, coupled with a huge amount of unfair dismissal case law to draw on, the legislators should not find it too hard to come up with a legal definition of casual employment.

On the other hand, we all know what casuals were before the advent of labour hire firms: a warm body you get in to fill a gap caused by someone pulling a “sickie” or (maybe) short-term leave vacancy.

Temporary or fixed term employment

Which leads to the issues surrounding the employment of temporary or fixed term employment. The employment of such a person may be warranted by an employer to fill short, medium long-term vacancies or maybe a fixed term budget allowance.

Temporary and fixed term employment are treated, by industrial law, as “permanent” or “ongoing” employees for the purpose of the accrual of leave entitlements. That is, you would pay the “temp” as you would a permanent employee (albeit, probably at a lower rate of pay – depending on which Modern Award/EBA in play), but on a pro-rata basis. Annual leave would usually be paid at the end of the assignment.

The problem with such temporary/fixed term arrangements is that the courts have determined that the dates of such employment are set in stone. That is, (except for serious misconduct), to be considered a temporary/fixed term employee, the worker must serve out the entire contracted period (and also not exceed this period, unless a subsequent agreement is put in place).

Put simply, contracts that state “up to X date” (known as “outer limit contracts) have been determined not to be temporary/fixed term employment. This goes without saying, if you wish to shorten the length of the employment.

I believe that to fix this issue, legislation needs to be adopted to provide for “outer limit” contracts.

Permanent Casuals

There is no such animal. You are either “permanent” or “casual”. Not both. End of story.

I know of a number of businesses who adopt this model (hence the limitations imposed under unfair dismissal law). And they complain when an employ does not turn up for work!

For the uninitiated, casual employment is a series of “engagements” (usually a day) and each period of casual employment concluded at the end of each day. So, the “casual” bit works both ways, the employee may say “do not turn up for work tomorrow” and the employee may say “no thanks”.

Some other companies use an initial period of casual employment as a “probationary period”. The reward for becoming so-called “permanent – the taking away of the casual loading, effectively rewarding the employee with a 25% pay cut. Remember, if you are worried about unfair dismissal, employees must be employed for longer than 12 months if you employee fewer than 15 employees or six months if you employ more than 15. This is plenty of time to decide.

Full-time ongoing employment

Notice I did not use the work “permanent”. What employment is permanent these days (perhaps the public service?), but I digress.

Employees who are lucky enough to be employed on a full-time ongoing basis as do part-timers, have the most job security of all employment types. They are entitled to all sorts of leave arrangements, including able to take a holiday. They are also more likely to be able to apply for a mortgage to buy a house.

Nothing to see here. Let us move on.

Part-time ongoing employment

Everybody knows that a “permanent part-time” (see my previous comments) is less than the hours of a full-time employee; usually but not always 38 hours per week.

Under most (if not all) Modern Awards, a part-time employee must:

  • Be advised (in writing) on which day of week they will work, and the hours on each day to be worked. I get this. This restriction is put in place to stop unscrupulous employers from changing a part-timer’s days to avoid paying public holidays. You usually work on a Monday, “not this week mate. Public holiday on Monday we will move you to Tuesday”. Simple.
  • If the agreed hours (remember, in writing) are exceeded on any day, then overtime is payable.

And it is the overtime bit that gets on my client’s (and my) nerves. This is a fairly recent event in industrial relations terms, creeping into all awards.

It is my strong belief that the payment of overtime for anything less than the full weekly hours (again, usually 38) is not helpful to the employee, who may otherwise benefit from additional hours, or the employer who will be reluctant to offer further hours due the cost imposition (or ignore this requirement altogether).

The answer is simple. Overtime should only be paid after working 38 hours (or average of) a full-time worker.

Summary and Conclusion

Casuals

  • A definition should be legislated and placed in the Fair Work Act.
  • Casuals should be a hire of last resort – not a business model.

Permanent casuals

  • No such thing. Move on.

Temporary/Fixed term

  • Again, the definition should be refined to allow for “outer limits” of employment, therefore allowing for greater flexibility in employment.

Part-time

  • Remove restrictive overtime provisions and align with full-time hours for the purposes of overtime.

Full-time

  • The holy grail. If the business has the capacity, then this should be the first option.

Unfair dismissals

On a final note, employers have been critical of this legislation since its inception. I agree. It has developed its own $multi-billion industry – especially in the No-win, no-fee space.

However, the spectre of an unfair dismissal should not be used as a business model. If you want happy, productive workers – treat them with respect and be on the look-out for toxic employees and/or poor behaviour and address these issues in a professional manner treating each case in a consistent and but fair manner.

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Introduction

You can read the full decision here.

When hiring for temporary or fixed-term employment, always ensure that there is a written contract in place that clearly sets out the parameters of the employment. And don’t forget: if hiring for a fixed term, if the job ends before that date arrives, then your business is still required to pay the “balance” of the employment period.

In hiring for additional or project work, consider casual employment, which (arguably) is not subject to unfair dismissal laws, unless the casual employment has been regular and systematic for more than 12 months.

Background

The Applicant was employed as a Housing Support Worker for a community legal centre in Western Australia.

The Respondent objected to the application for unfair dismissal on the grounds that the Applicant was not dismissed because she was a person employed under a contract of employment for a specified period of time and her employment terminated at the end of that period, or she was employed for a specified task and her employment was terminated on completion of that task.

Facts

  • The Applicant was first employed by the Respondent on a written contract dated 27 February 2017 for a period up until 31 October 2017. That employment was based in Port Hedland. This contract refers to it being a “…fixed term contract…”. The contract expressly states the commencement date is 27 February 2017 and the contract end date is 31 October 2017.
  • The Applicant then moved to Karratha and was again employed under a written contract dated 30 April 2018, for a period up until 30 June 2018. This second contract refers to it being a “…fixed term contract…”. The second contract expressly states the commencement date is 30 April 2018 and the contract end date is 30 June 2018.
  • The Applicant then had her employment aligned with others in the organisation, that is according to the term of the funding (which concluded 30 June 2019). This was a “verbal” arrangement.
  • The Respondent’s evidence relied upon the “common knowledge” that all roles within the organisation were aligned to funding. That is, no funding, no job.
  • The Applicant failed to attend a performance management meeting in early June 2019 to discuss a breach of the organisation’s code of conduct and performance issues due to her late or failure to submit reports for her program and her overall work management. She was subsequently she was stood down with pay until the “end” of her contract being, according to the respondent, 30 June 2019.

Not to worry?

The Applicant’s evidence was that in 2019, the then CEO and acting CEO, told her not to worry about funding and because she was still employed, she thought her position was secure. Other employees were worried about their contracts, but employees were never given a full and clear explanation that their contracts had ended or ceased, or they were no longer working. The Applicant says employees were told to “…keep working and we’ll see what happens”.

The Applicant’s evidence was that when she an email from the CEO she knew there was no contract and she was upset and distraught that the CEO was dismissing her, so she walked out and sought legal advice from there. The Applicant, following her dismissal, requested a copy of her contract of employment, but this was not supplied.

Onus of proof on the employer

Given this decision deals with the Respondent’s jurisdictional objection the onus is on the Respondent to put forward evidence to the Commission in support of its objection.

Case law

In Dale v Hatch Pty Ltd [2015] FWC 4970 (12 October 2015). His Honour Chief Justice Wilcox held that the exclusion does not apply whenever an employer employs a person to work on a particular project, whatever its size and duration. His Honour further held that:

“The words “for a specified task” qualify the words “contract of employment “. The contract of employment must be for a specified task; it must be a contract under which the employee is to carry out a specified task. The words “for a specified task” have nothing to do with the employer’s task, or project.”

The Commissioner also noted that:

“His Honour also observed that it is understandable that the provisions relating to unfair dismissal should not be available to people who undertake only a specified task, and that it would be anomalous to restrict the employer’s right to terminate the contract after the task is completed. Conversely, given that many projects continue for many years while employees come and go, it would be equally anomalous to exclude relief from unfair dismissal simply because an employee was engaged in connection with a particular project”.

These principles have been applied in a number of decisions of the Fair Work Commission including:

  • Hewitt v ACTek Custom Engineering Pty Ltd, in which it was emphasised that the phrase “a specified task” covers situations: “where an employee has been employed to perform a project or job which is distinct or identifiable in its own right…”.
  • Derar v Recruitco Pty Ltd, where it was held that an employment offer from a labour hire company restricted to an engagement by a host organisation, defines the specific duration of that particular employment and results in the employee being engaged for a specified task.
  • Henderson v John Holland Pty Ltd where it was held that an employee was employed for a specified task in circumstances where the employee had been engaged on a number of successive projects under a series of separate employment contracts relating to each project, specifying the task of ‘concrete finisher’, that the employee performed on each project.

The Commissioner finding

The commissioner found that that following the end of the second written fixed term contract, on 30 June 2018, the parties did not enter into a third written contract.

The Applicant’s employment relationship was not made up of a sequence of time-limited contracts of employment. She was first employed by the Respondent under a written contract of employment for a specified period of time, from 27 February 2017 until 31 October 2017; and was then not employed again until six months later; with this “second” contract of employment ending 30 June 2018.

There was no written contract dealing with the employment after 30 June 2018.

Concluding

In dismissing the jurisdictional objection, the Commissioner concluded that:

“What little evidence there is as to what occurred before 1 July 2018, does not demonstrate there was an oral contract made between the Applicant and the Respondent which was either a contract of employment for a specified period of time end 30 June 2019 or for the completion of a specified task by 30 June 2019.

“This is not an instance where it could be argued that it was an implied term of the contract between the Applicant and the Respondent that the contract of employment was for a specified period of time or for the completion of a specified task. There is no evidence that such a term was in the circumstances absolutely necessary for the effective operation of the contract, such that it should be taken by the Commission to have been implied.

“Further the Respondent sought to adduce evidence to support their submission that it was custom and practice in the sector for employees to have fixed term contracts which temporally aligned with the period of grant funding; however, the evidence of the Applicant rejected this proposition. The evidence in this case does not demonstrate that there was an industry custom or practice so well-known as to be implied as a term of the contract in this instance, that the contract was for a specified term or for the completion of a specified task”.