There’s Nothing Casual about Double Dipping
The Federal Court’s recent judgment in the WorkPac v Skene case regarding the employment status of a worker and its far-reaching implications have sent waves of confusion in the business community.
The facts are simple. Mr. Skene was employed by WorkPac and worked a 7 day on, 7 day off roster which was set in January for the rest of the year. Mr. Skene's contract classified him as a casual and provided for him to be paid a flat rate per hour which expressly included 'a loading in lieu of leave entitlements' and termination notice of 1 hour. When Mr. Skene's employment was terminated, he did not receive any payment in lieu of untaken leave on termination – which he subsequently sued WorkPac for.
The court found that despite Mr. Skene being characterized as a casual in his contract, he was found to be permanently employed by WorkPac in terms of the Fair Work Act and common law considerations. It also found that there was no evidence that Mr. Skene actually received casual loading. WorkPac was also fined for being in contravention of the Fair Work Act.
In making its judgment, the court discussed the principles of “double dipping” and the concept of casualness.
The court indicated that in characterizing casual employment, the 'essence of casualness' consists of, amongst others:
- The absence of a firm advance commitment as to the duration of the employee's employment or the days (or hours) the employee will work;
- No firm advance commitment from the employer to continuing and indefinite work according to an agreed pattern of work (and the casual employee will also not provide a reciprocal commitment to the employer);
- Irregular work patterns, uncertainty, discontinuity, intermittency of work and unpredictability;
- The substance of the employment relationship is crucial and how the worker is characterized in their contract is only a factor.
The concept of double dipping is where employees are entitled to both the benefits of causal loading and paid annual leave. The court found that if a worker is deemed to be a full-time or part-time employee, but an employer nevertheless elects to pay them casual loading, this does not mean the employee is not entitled to payment of annual leave and other full-time/part-time employee entitlements.
The court’s findings have left both employers and employees with more questions than answers. Businesses need to be able to turn to legislation for clarity and in this instance, the Fair Work Act is not providing this. An amendment to the Fair Work Act to define casual employment and/or a casual employee will prevent future double dipping and create certainty in the nature of the employer/employee relationship.
In the meantime, when employing casual workers, employers must ensure there is no firm advance commitment and that they can prove they have paid their casual workers' casual loading. All aspects of the nature of employment, where possible, must point to its casualness.