With the widespread use of casuals in the higher education sector, a recent Full Federal Court decision is particularly relevant to your university.
In the decision of WorkPac Pty Ltd v Skene  FCAFC 131, the Full Federal Court found that a casual labour hire worker was an employee entitled to annual leave payments under the National Employment Standards (NES) in the Fair Work Act 2009 (Cth) (Fair Work Act).
The employee was employed as a dump truck operator on a seven day on, seven day off continuous roster arrangement of 12.5 hours per shift. His roster for each year was set in advance. After working from July 2010 to April 2012, the employee was stood down, and subsequently dismissed. Under his employment contract, the employee was characterised as a casual employee which meant he had no annual leave entitlements under the relevant enterprise agreement. Following the termination of his employment, he claimed he was improperly characterised as a casual employee – the way he had worked meant he was a permanent full-time employee and, relevantly, had an entitlement to annual leave. The key issue in the proceedings was whether the employee was a permanent full-time employee and consequently entitled to payment in lieu of annual leave on his employment coming to an end.
In 2016, at first instance, Judge Jarrett held that the worker’s regular and predictable working arrangements meant he was an employee entitled to annual leave under the NES – even though the offer of employment gave the employee the status of 'Casual Field Team Member' with no annual leave entitlement under the employer's enterprise agreement. Judge Jarrett found the driver was entitled to payment for accrued annual leave under the NES on termination of his employment and ordered the employer to pay the worker compensation of $21,000 plus $6,700 interest.
The employer appealed the decision on the basis that Judge Jarrett erred in failing to find that the employee was a casual employee for the purposes of the Fair Work Act.
At the heart of the appeal was whether, in circumstances where the Fair Work Act does not define casual employment, the definition of casual employment in the NES should come from:
The employer contended:
The Full Court considered the main question posed in the appeal was: Did Parliament intend the words ‘casual employees’ in the NES to be used their in their ordinary, legal sense, or the specialised non-legal sense which the employer contended was common to federal industrial instruments?
The Full Court was not persuaded there is a uniformly understood specialised meaning of ‘casual employee’ referable to the use of that term in federal industrial instruments. Their Honours found:
The employer’s appeal was dismissed, and the matter remitted to the Federal Court for the re-determination of the compensation payable to the employee for the employer’s failure to meet his entitlements to annual leave and any pecuniary penalties to be imposed.
Employers have cited the outcome of this case as giving rise to employees potentially ‘double dipping’ on entitlements as permanent employees having already received a casual loading.
The employer is not appealing the decision.
Given the number of casuals your university is likely to engage, your university may bear a substantial unexpected annual leave liability if casuals are not appropriately classified and engaged. In addition, other NES entitlements such as personal leave and redundancy pay may also need to be considered.
Some risk mitigation steps to consider include: