Many employers breathed a sigh of relief that the complicated Workpac case about a casual has been resolved by the High Court, which found the employee was casual and not entitled to annual and other leave as claimed.
This saga started over three years ago when the federal court found a labour hire employee on a mine site was not a casual employee despite him being explicitly engaged as one and paid a casual loading. Despite the fact the loading was broken down into elements covering the major benefits of permanent employment, the court said that the employee was entitled to annual leave anyway.
This was the so-called ‘double-dipping’ element that so many employers feared. Another employee of the same company, seeing that result, chanced his arm as well. But the High Court found the employee had agreed to be engaged as a casual, that the loading was clearly explained including its derivative parts, and that the contracts the employee agreed to had definite end dates each time; and the parties honoured those in practice. It also observed the earlier case involving his workmate had been wrongly decided.
This case confirmed an essential element of casual employment, namely there was no “commitment between the parties to an ongoing working relationship after each assignment was completed”. In this regard, the Court said that it is not good enough to rely on expectation, saying a “reasonable expectation of continuing employment is simply not the kind of firm advance commitment to continuing employment the absence of which typifies casual employment.”.
This makes sense in the context of certainty. The Court said the parties to an employment contract must know at the outset the nature of the relationship. A mere expectation does not settle that. So in the absence of evidence that the contracts signed by the parties in this case were a sham arrangement, the contracts and behaviour of the parties were enough to decide the issue.
While the law was changed to define casuals along these same lines earlier this year, the case was run on the old law that existed at the time. Even so, casual employment contracts made under that old law ought to be reviewed to ensure that they align with the new law. Why risk it?
Despite this case and the legislative changes, there are still some tricky situations that aren’t so clear. While an end date of the assignments was a key feature in this case, each assignment was only six months. The picture is not so clear where that time frame is pushed out. Does it still work that way after a year, two, five? It leaves the question, ‘what’s the difference between a casual and a fixed-term employee?’ in the air. Care should be taken, and advice sought, in those situations.