Have Casual Workers Been Granted Annual Leave?
News headlines recently stated that casual workers have won the right to paid annual leave. This is following a decision in the Federal Court.
At present, there is no global change granting Australian casual workers paid leave. However, the case highlights the ongoing challenge of determining whether a worker is a permanent staff member entitled to paid leave and other benefits. Or a casual worker entitled to a casual loading.
The Case Study
In the WorkPac v Rossato case…
WorkPac is a specialist mining and engineering labour hire company. They employed Mr Rossato as a casual worker. This was across six consecutive employment contracts for a continuous period of approximately three and a half years. Over that time, Mr Rossato gets paid a casual loading of 25% of the minimum rate of pay payable under the Enterprise Agreement. This was in part, paid in lieu of leave.
Mr Rossato works every shift he was rostered for except where he was given approval to take rest and recreation. Also, when his partner was airlifted to hospital.
In its decision, the Federal Court found that Mr Rossato was a permanent full-time employee across each of his contracts. He was entitled to his accrued leave entitlements and payment for the public holidays where he was rostered off work.
WorkPac was unable to reduce the liability owing to Mr Rossato by the casual loading paid to him over the course of his contracts. The court noted: ‘There is a superficial attraction to the notion that something given in substitution of an entitlement has an equivalent value to the entitlement itself and is therefore of the same character’.
Each of the contracts signed by Mr Rossato contained a declaration headed ‘Casual or Maximum Term Employee’. However, the court reiterated the observation that, ‘agreements by which people are engaged to work are typically partly written, partly oral and “partly left to evolve by conduct” as time goes on.’ That is, what the employee signs up to does not necessarily define what the employment relationship becomes.
The WorkPac v Rossato case does not generally award casual employees paid leave entitlements but it does highlight the problem that can occur over time where the nature of the employment arrangement changes from casual to a more permanent arrangement.
Recognition of this pathway from casual to permanent employment is now a part of many Modern Awards. The Fair Work Commission’s updates to Modern Awards rolled out across this year include a Right to request casual conversion clause that enables a long-term casual worker to request permanent employment. The employer can refuse that request but only on ‘…reasonable grounds and after there has been consultation with the employee’.
The pathway also has political impetus with the Prime Minister’s recent ‘JobMaker’ speech at the National Press Club nominating the issue as one of the five working groups for negotiation.
In Brief: Types of Employment
Permanent employees – full-time or part-time.
Benefits include:
- Paid annual leave,
- Notification on termination,
- Redundancy where applicable, and
- On 12 months continuous service, parental leave, right to request flexibility, and access to unfair dismissal.
Casuals.
Works without guaranteed or pre-arranged hours, can choose whether to accept work, usually works irregular hours, doesn’t receive paid sick or annual leave, and can end employment without notice (unless a registered agreement, award, or contract requires it). Receives a casual loading and is entitled to unpaid carer’s leave and family and domestic violence leave.
Long-term casuals.
A casual employee employed by the business on a regular and systematic basis. There is a commitment to ongoing work. The employer has not made it clear that they should not have an expectation of ongoing work. Long-term casuals have the same entitlements as casual workers except they are also entitled to:
- Take parental leave,
- Request flexible working arrangements, and
- Access to unfair dismissal.
Shift Workers.
An employee who works shifts and gets an extra payment for working shift hours. Generally, Awards or agreements have a specific definition of what a shift worker is and the conditions that apply. Refer to the relevant Award for the definition of full time, part-time or casual employees.
Fixed term contract.
Same entitlements as permanent employees (such as annual leave) but the employment relationship is for a fixed period. Where the employer continually renews the contract, disputes may arise as to whether the employee is a permanent employee.
Independent contractor.
Generally, contracted to the business to produce a specific result for the business (as opposed to hours worked). Operates autonomously to the business, is generally financially self-reliant. It chases profit (that is a return on risk) rather than simply a payment for the time, skill and effort provided.
Remember: You should always refer to the Fair Work Ombudsman for clarification of your specific circumstances.
JobKeeper’s Impact On Employee Entitlements
To be eligible for JobKeeper payments as a casual employee, the individual had to be a long-term casual at 1 March 2020. Casual employees do not qualify unless they meet this condition. For some employers, JobKeeper ensures there is now a clear definition of some employees as a long-term casual where employers pay JobKeeper payments.
Long term casuals have additional entitlements to casual employees providing for parental leave and the right to request flexible arrangements.
This is general advice only and has not been prepared with your situation and needs in mind. For individual and personalised advice, we highly recommend that you seek out proper professional advice from your adviser.
