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High Court overrule on casual employment
Yesterday, the High Court handed down a unanimous landmark ruling overturning recent decisions of the Federal Court to award nominally casual employees leave entitlements.
Those Federal Court decisions involved labour hire employees on fly in fly out back-to-back contracts with rostered hours and pre-booked accommodation of 6 to 12 months aggregating to over 2 years of continuing employment in each case. The Federal Court
formed the view that that sort of arrangement was not characteristic of casual employment and that the employees in question would have had a reasonable expectation of continuing employment. They also decided that the employees were entitled to annual leave, because of those facts and because of deficiencies in the employment contracts (not separately
identifying the amount of the casual loading so as to demonstrate the adequacy of the loading to set off leave entitlements).
These decisions were the stimulus for the amendments to the Fair Work Act passed earlier this year in relation to casual employment. See our previous article on these changes at https://ridgelinehr.com.au/new-standards-on-casual-employment.
One of the elements that the legislative amendments introduced was that a casual employment arrangement could not include a “firm advance commitment to ongoing work with an agreed pattern of work”.
In yesterday’s decision, the High Court determined that a reasonable expectation of continuing employment on the part of the employee was not a firm advance commitment to continuing employment on the part of the employer.
The High Court also found that, notwithstanding the length of continuity of employment and the presence of a regular and consistent roster for the period of each contract, it did not mean that there was a commitment between the employer and employee to continuing employment beyond each limited term contract that they entered into.
What does this mean for employers?
On face value, it might appear that an employer can just engage people as casual on limited term contracts and, provided the contract is properly constructed, that would be the end of it.
However, we mustn’t lose sight of the facts that:
- After a qualifying period of 12 months employment and subject to certain conditions a casual employee can request conversion to full or part time employment and, in the case of businesses with 15 or more employees, the employer must offer conversion or provide reasons as to why not.
- Conversion disputes can be taken to the Fair Work Commission for conciliation and arbitration.
Awards also have casual conversion provisions which are different to those in the Fair Work Act but these are currently under review by the Fair Work Commission (indications are that they will likely conform with the new legislative provisions from 27 September 2021).
- Casual employees can make unfair dismissal claims if they are regularly and systematically employed for a continuous period of 6 months for businesses with 15 or more employees or 12 months for those with less employees.
- Casual employees can make General Protections claims for adverse action taken by an employer against an employee trying to exercise a workplace right such as the right to convert from casual to full-time or part-time. We can expect that the question of an employer taking adverse action by deliberately contracting someone for short periods in what is really an ongoing job so as to avoid casual conversion obligations will be tested at some point.
- A casual employee can still claim WorkCover……….and we know that insecurity of work plays a significant part in the mental health challenges that we have in our community today.
Don’t cut off your nose…..
Currently, one of the biggest challenges that businesses have is attracting and retaining staff.
For a number of reasons, there is a serious shortage of quality candidates across most industries.
So, if you have someone that you value and you want to keep, look after them and let them know you value them by offering them the opportunity to convert (or employ them on a continuing basis in the first place).
The legislation just sets out the minimum obligations – smart employers who really value their people will do better than that.
Ridgeline Human Resources Pty Ltd
ABN : 24 091 644 094
6 Ellesmere Ave, Croydon Victoria 3136
1300 108 488
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