Casual workers can be a fantastic resource for farmers ready to reap a bountiful harvest, or complete laborious one-off tasks on a property.
However, what happens if you start regularly engaging the same labourers to work on additional tasks? Do they become permanent employees entitled to receive paid annual leave?
An employee’s right to paid annual leave is secured by the National Employment Standards (NES) contained the Fair Work Act 2009 (Cth) (Act), regardless of any industrial instrument. However, the right to annual leave under the NES does not apply to casual workers.
Despite this the Act does not define what it means to be a ’casual’ worker, and instead, has left this to the courts to decide.
In August 2018, the Federal Court handed down the landmark decision of WorkPac Pty Ltd v Skene (Skene), finding that a ‘casual’, fly-in fly-out truck driver was, in fact, not a casual employee and was entitled to annual leave. This ultimately meant that despite having been paid an additional casual loading in lieu of annual leave, the worker was entitled to recover annual leave ‘back pay’ for his time in the role.
The Court found that casual employees will only be defined as casual in reality, if their employment retains the “essence of casualness”: the absence of a firm, advance commitment as to the duration of the employee’s employment of the days (or hours) the employee will work.
Since Skene, new regulations (Regulation 2.03A of the Fair Work Regulations 2009 (Cth)) provide that if a casual worker is found to actually be a permanent employee for NES entitlements, these entitlements can be offset against a casual loading clearly identifiable to make up for the particular entitlement. However, where the casual loading fails to clearly correspond with the NES entitlement, employers may find themselves at risk of significant back-pay.
Tips for employers
Following these changes, employers should review the actual employment arrangements currently in place for casual workers or labourers engaged to help. This is especially the case if the same workers have been regularly engaged for more than six months, albeit for different tasks on a property.
Employers in the agricultural industry should also be aware of recent changes to the Horticulture Award 2010, which allow casual workers who have worked a regular pattern of hours for the previous 12 months make a request that they be made a permanent full time employee. While this is not an automatic right to be converted to permanent employment, employers should be mindful of the compulsory process that follows after an employee’s request.
Author: Kylie Wilson
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.