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Which case won?

casea
The case for the employee
  • My hours were regular, predictable and set 12 months in advance.
  • My employment was continuous.
  • I was paid a flat hourly fee without any casual loading.
  • My employment was facilitated by a fly-in, fly-out arrangement. Flights and accommodation were provided by my employer at no cost to me.
  • It is obvious that because of the fly-in, fly-out arrangement, I was unable to leave the mine during my seven day “on” period and was expected to be available on an ongoing basis during that period. It was not possible for me to elect not to work on a particular day that I was rostered on.
  • The court should find that I was a regular employee who was entitled to accrue annual leave and be paid this accrual at the termination of my employment. My employers should also be penalised for breaching the Fair Work Act.
caseb
The case for the labour hire company
  • The employee signed an agreement that clearly stated he was a “casual” employee.
  • The employee was paid by the hour.
  • His employment could be terminated upon only one hour’s notice.
  • In the section of the Fair Work Act that deals with annual leave, the term “casual“ should be interpreted in its common industrial meaning, ie the employee was a casual because his agreement designated him as such.
  • Accordingly, he was also a casual employee under the relevant section of the Fair Work Act.
  • The court should find that the employee was not entitled to annual leave because he was employed as a casual.

So, which case won?

Cast your judgment below to find out
Case A Case B

Case A won. You were right!

How people voted
a74%
b26%

Expert commentary on the court's decision

“This case is the landmark case that every employer who employs casuals must be aware of. There comes a point when a casual employee is no longer casual.”
Court finds in favour of employee

The case was originally heard in the Federal Circuit Court, in Skene v Workpac Pty Ltd [2016] FCCA 3035 anSkene v Workpac Pty Ltd (No.2) [2017] FCCA 525, before making its way to the Full Court of the Federal Court, in Workpac Pty Ltd v Skene [2018] FCAFC 131 

The appeal judges agreed with the worker, Mr Paul Skene, rejecting the arguments of the labour hire company, WorkPac Pty Ltd, that Mr Skene should not be paid annual leave accrual on termination.

Does the term “casual employee“ have more than one meaning?

The case hinged on the definition of the term “casual employee” and the application of section 86 at the beginning of Division 6 of the Fair Work Act. Division 6 deals with annual leave. Section 86 states: “This Division applies to employees, other than casual employees.” 

WorkPac argued that the term “casual employee” in section 86 should be understood not in its usual legal sense, but as having its “common industrial meaning”, that a casual employee is an employee designated as such by the applicable industrial instrument.  

WorkPac contended that this was an “entrenched notion” of what had been commonly understood to be a casual employee by federal industrial tribunals for the past 70 years.

Meaning of “casual“ is consistent throughout Fair Work Act

In making its decision, the court dismissed WorkPac’s arguments and said that there was no “common industrial meaning” applicable to the term “casual” in section 86 of the Fair Work Act and that it was incorrect to suggest that the section contained a different meaning than other parts of the Act.

The judges held that Mr Skene was unable to leave the worksite due to the nature of his work, was expected to be at work for the entirety of his rostered time and was given the expectation of at least a year of rostered days.

Specifically, the court said that Mr Skene had no choice in his daily working arrangements and that there was no opportunity for him to choose not to work any particular shift or hours offered to him” by his employer.

With an arrangement of this nature, Mr Skene had a reasonable expectation of his job being more than a mere casual engagement. For the purposes of section 86, he was entitled to annual leave. 

“Essence of casualness“ in employment law

The judgment referred to a previous case, in which the essence of casualness was described as 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. (See Hamzy v Tricon International Restaurants trading as KFC [2001] FCA 1589.) 

The appeal court also quashed the primary judge’s reasons not to impose a fine on Workpac and remitted the matter to the Federal Circuit Court for determination of the compensation amount payable to Mr Skene and the penalty amount to be imposed on Workpac for breaches of the Fair Work Act.

Employers must ensure workers receive correct entitlements

Employers must be careful to ensure that their employees are correctly determined as either “full time”, “part time” or “casual”. Employers must be aware that there is no such thing as a “full time casual” employee and such titles are confusing for all parties. 

If a casual employee has a reasonable expectation that their engagement will continue into the foreseeable future, it is prudent to review your practices to ensure that employees are receiving their correct entitlements. A good review to do is to look at your payroll.

In the example case, the employee was being paid a flat rate for all hours worked. Casual employees should receive a distinct casual loading on top of their base rate. Paying a flat rate could be confused with a rate for full-time or part-time employees. Casual employees are paid a loading in exchange for not accruing annual leave and personal leave.

Casual employees are good to fill gaps in your labour force, but if they start to work regular, full time hours (38 hours per week or more) over a lengthy period, you should seek legal advice about the status of the employee. If a worker has little choice in his or her working arrangements, they are probably not a casual employee.

Casual conversion clauses in modern awards

Further, in some industries (the vehicle industry, for example), the modern award covering the industry may contain “casual conversion” clauses. 

This means that if a casual employee is working the same hours or days for longer than six months, they are entitled to request to be made a permanent employee. Employers must have valid reasons for refusing such requests and should be careful about refusing.

Designating a worker as a casual will not help employers

The crux of WorkPac v Skene is that describing the employment relationship as casual is not of itself determinative. An employment contract might specify that a worker is a casual employee, but this will not override the true legal relationship which is determined by a full consideration of the circumstances. 

Michael Black QC, in Re Porter; Re Transport Workers Union of Australia said it perfectly: The parties cannot create something which has every feature of a rooster, but call it a duck and insist that everybody else recognises it as a duck.

For information about a related case, please see Casual worker rights can include annual leave and sick leave, says Federal Court. See also Contractor or employee – the grey area of the gig economy and Are you employed in casual work but doing the same job as a permanent employee?

NOTICE: This article is accurate as at the time of publication and does not constitute legal advice. Please see our legal notices page for more information. Information related to coronavirus can be outdated very quickly.
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