September 2018 | Kieran Kelly

The 16 August 2018 decision of the Federal Court in WorkPac Pty Ltd v Skene [2018] FCAFC 131 (WorkPac v Skene) has significant ramifications for businesses that rely on casual employees.

The characterisation of an employee as casual or permanent determines a wide range of entitlements, from the payment of leave to notice of termination and redundancy pay.

In WorkPac v Skene, the Full Court of the Federal Court was asked to decide if Paul Skene, a fly-in, fly-out dump truck operator at a Queensland mine operated by Rio Tinto Coal Australia Pty Ltd, was a casual employee under the Fair Work Act.

The Full Court found that Mr. Skene was not a casual employee in a decision that will reverberate throughout businesses that rely on casual workers.

  • Each case will turn on its facts

Mr. Skene’s letter of offer stated his employment to be casual and in relation to a 3-month assignment. Under a transitional industrial agreement, the WorkPac Pty Ltd Mining (Coal) Industry Workplace Agreement 2007, Mr. Skene was likewise a casual employee.

Mr. Skene was rostered to work 7 days on/7 days off continuously (other than one 7 day period of unpaid leave) on a roster that was set 12 months in advance. His flights and accommodation were paid for and he was expected to be available on an ongoing basis. Payslips confirmed that Mr. Skene’s hours of work and rate of pay were regular.

The assignment eventually lasted 22 months.

The Court determined that whether a person is a casual employee is established by a range of key indicia, including “irregular work patterns, uncertainty, discontinuity, intermittency of work and unpredictability”. The Court illustrated how a casual employee can transform into a part-time or full-time employee.

Adopting these principles in the case of Mr. Skene, it was found that he was, in fact, a full-time employee and was entitled to be paid annual leave or a payment in lieu of annual leave.

WorkPac was found to be liable to pay pecuniary penalties.

  • Where does the truth lie?

Concern has been raised that the decision of WorkPac v Skene has created a veritable minefield for employers that will be difficult to traverse.

However, the truth is that the decision simply indicates that care must be taken when asserting an employee is employed on a casual basis.

Ongoing and consistent employment on a casual basis may lead to employees becoming employed on a permanent basis and accruing entitlements that may be significant.

Businesses must, therefore, take care to review the status of their employees and not rely on bald assertions in employment agreements.

If there is any doubt, legal advice should be sought.