Telum Civil (Qld) Pty Limited v Construction, Forestry, Mining and Energy Union –  FWCFB 2434 – 22 April 2013
The long-standing argument about what exactly constitutes casual employment has been tackled in a landmark case by the Fair Work Commission. And the news is good. The Full Bench has squarely come out in favour of the proposition that if a person is engaged and paid as a casual, then come what may, that person is a casual.
The back story here is nearly as old as the employment category itself is. Many common law, and some industrial tribunal decisions have taken the view that the actual way the person works, not what the employer and employee agreed to in the first place, is the determinant of the nature of the relationship. So the true status of a particular employment contract, however it is described, is determined not by what the employee is called, but by the way they work. Hence a regular and systematic work pattern has been long held as indicative of permanent , not casual, employment.
This has created some undesirable outcomes, where employees have rorted the system, claiming all the benefits of full time employees as well as the casual loading. In most cases, the courts have been unable to discern which parts of the casual loading should be allocated to the various benefits foregone, and have decided that none of it can be offset, and awarded the full suite of benefits. This is unfair to both the employer and the other full time employees for obvious reasons.
This FWC decision draws on various provisions of the federal Fair Work Act 2009 which uses terms such as “long term casual employee” and “regular and systematic employment”. The decision makes the valid point that if the common law approach were to be maintained, then by definition, the long term casual couldn’t in fact be a “casual”. In other words, clearly the parliament recognised that some employment relationships are defined by the parties and their relevant award/enterprise agreement as “engaged and paid as such” casuals, and that should be respected, should be left undisturbed.
This decision is very important because it puts aside a long history of decisions which have focussed on the actual behaviour of the parties to the employment relationship after it has been established. The FWC in this decision is saying so long as the relationship is entered into under an award or enterprise agreement which uses the words “engaged and paid as such”, then how the work patterns occur is irrelevant. The person is a casual. The next step then is, if the benefits a casual both receives and foregoes are spelt out in the award/agreement, then there is no argument about what the casual loading is for.
It remains to be seen if the decision will survive appeals to the courts. Given the express terms of the Act relied upon, it is difficult to see how it could be overturned. The key issues for employers who wish to rely on this decision are that their award or enterprise agreement uses the words “engaged and paid as such”, that the casual loading is described as a loading to compensate for specific items that are the usual province of permanent employees such as annual leave, sick leave etc. (and all these conditions are all spelt out) and that the agreement of the employer and employee for the employment relationship to be casual is evidenced in some way, preferably a letter or contract document stating that clearly.