Can casual employees work regular and systematic hours?

Often the operational requirements of a business including the size of a business and the uncertainty of future income necessitate the hiring of casual employees. The benefit of having a casual workforce is fundamentally the flexibility of being able to hire an employee for as long or for as short a period as there is work available. However in some circumstances, casual employees may find themselves working the same hours week to week over an extended period of time, maybe even years. This means that a casual employee may appear to be a committed, long term employee more akin to a permanent employee than a casual.

A recent decision made by the Full Bench of the Fair Work Commission has determined that a casual who works regular and systematic hours will still be classified and treated as a casual employee so long as that employee is engaged as a casual pursuant to the terms of a Modern Award or Enterprise Agreement that covers them. The test will hold true regardless of whether the employee would be assessed as a casual under the general common law meaning of the word or not.

The consequences of failing to identify the classification of an employee as either a permanent or casual employee can have significant consequences. The most important factor is whether an employee is entitled to the casual loading of 25% or whether an employee is entitled to the benefits of permanent employment such as annual leave, personal/carer’s leave, notice of termination and redundancy benefits. A decision that an employee has been incorrectly assessed by an employer as a casual could involve payment to the employee of penalties and back pay of annual and other personal/sick leave entitlements.

The general common law position is that a feature of casual employment is its temporary or irregular nature, “the employee is not obliged to accept an offer to work a particular shift; [and]the employee’s employment technically commences at the beginning of a particular shift and ceases at the end of that shift.[1] In effect, the casual employee is paid the 25% loading to compensate them for the intermittent nature of their employment.

The Telum Decision[2] handed down on 22 April 2012 sets out the circumstances in which a casual employee who works:

  1. full-time hours;
  2. on a regular and systematic basis;
  3. with regular and consistent start and finish times; and
  4. who attends work at the required time without regular direction to do so;

will nevertheless still be classified as a casual employee for the purposes of the National Employment Standards.

In order to satisfy the test set out in the decision, an employer must engage the casual employee in accordance with the relevant provisions of a Modern Award or Enterprise Agreement that covers the employee. The arrangement of casual employment can vary between Modern Awards but generally require an employer to:

  1. inform the employee (usually in writing) at the time of first engaging the casual that he or she is a “casual”; and
  2. pay the casual the 25% loading in lieu of entitlements.

It is essential for employers to be certain of whether a Modern Award, if any covers their employees. Not only do Modern Awards provide for minimum rates of pay but a Modern Awards may also have specific provisions regarding casual employees that an employer must comply with. For example, a Modern Award may set a maximum number of hours that a casual employee can be rostered to work in a week, or require an employer to offer the casual permanent employment after six months.

The Telum Decision goes some way to bringing certainty to those employers and employees who are covered by a Modern Award or Enterprise Agreement. For those employees however, who are not covered by an Award or Enterprise Agreement, the case emphasizes the importance for employers to be mindful of casual employees who might be considered to be permanent employees because of the regular nature of their work.

Contact our Specialist Employment & Workplace Relations Team for more information.

[1] Public Service Association and Professional Officers’ Association Amalgamated Union of New South Wales v Department of Justice and Attorney General (Corrective Services NSW) [2010] NSWIRComm 148 at [25].
[2] Telum Civil (Qld) Pty Limited v Construction, Forestry, Mining and Energy Union [2013] FWCFB 2434 (the Telum Decision)