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Federal Circuit Court judgment acts as warning for employers

Federal Circuit Court judgment acts as warning for employers

30 Aug 2017

Federal Circuit Court judgment acts as warning for employers

Federal Circuit Court judgment acts as warning for employers

30 Aug 2017

A Federal Circuit Court judgment from last week has determined that an employee engaged by WorkPac Pty Ltd pursuant to a casual contract of employment was in fact a permanent employee for the purposes of the Fair Work Act.

Why is this relevant for employers?
This case continues a trend of Federal Court and Federal Circuit Court judgments that emphasise that an employee’s status will not be determined simply by how the parties describe the relationship.
 
Rather, the Courts will look at all the factors relevant to the employment relationship to determine whether an employee is truly a casual for the purposes of the Fair Work Act. These factors include:
 
·         the permanence and regularity of the employee’s roster patterns;
·         what an employee is told upon commencement of employment;
·         the documents signed upon commencement of employment; and
·         the terms of any relevant EA or Award.
 
Employers need to be certain that their contractual arrangements reflect the true nature of an employee’s engagement, or else they may face back-payment claims for annual leave, personal leave, notice of termination, redundancy and other permanent employment entitlements.
 
In this case, although both the employer and employee believed the employee was a casual and although the employee was paid a casual loading, the Federal Circuit Court ruled that the employee was not in fact a casual. This meant that the employee was entitled to annual leave in addition to his casual loading.
 
Trend identifies Tension between Fair Work Commission approach and Federal Court/Federal Circuit Court approach
This case sits somewhat uncomfortably with the recent Fair Work Commission case of Telum Civil (Qld) Pty Ltd v CFMEU [2013] FWCFB 2434, where a Full bench of the Fair Work Commission held that, where employees are engaged under an industrial instrument, the industrial instrument determines the status of the employee’s engagement.
 
The recent Federal Circuit Court decision instead maintains that one must look at all relevant factors - not just what the industrial instrument says.
There accordingly appears to be a growing distance between the Federal Court/Federal Circuit Court approach to this issue and the cases emerging from the Fair Work Commission.
 
Where to from here?
In light of the decision, employers should be reviewing their regular and long term casual engagements to determine whether these arrangements can continue to be characterised as casual engagements.
 
Australian Business Lawyers & Advisors has a team of experts who have been regularly advising on this issue and who have taken a lead role in the Fair Work Commission’s 2016 test case on casual employment provisions in modern awards.  We are accordingly well placed to assist businesses in navigating what is becoming an increasingly controversial casual employment minefield.
 
Case details: Skene v Workpac Pty Ltd [2016] FCCA 3035 (24 November 2016)
 
If you have any questions please contact ABLA on 1300 565 846 or email info@ablawyers.com.au

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