ARE YOUR EMPLOYEES REALLY ‘CASUALS’? HIGH COURT FINDS THE CONTRACT IS PARAMOUNT

The aviation and transport industries rely heavily on a casual workforce, but due to recent case authority the issue of which workers are true ‘casuals’ has been unclear, meaning some casuals  have been entitled to both casual loading and leave entitlements when an employee was found to be a part time worker. 

The High Court has now clarified which workers are ‘casual employees’.   In Workpac v Rossato the High Court considered a claim by Mr Rosatto that he was not a casual employee.   Relevantly to the employment arrangement:

·        Mr Rosatto had been employed as a labour-hire truck driver on the basis of ‘assignments’; 

·        His contracts described him as a casual employee;

·        He was paid casual loading;

·        Sometimes the assignments would be lengthy and he was on occasion provided with a fixed roster up to seven months in advance; and

·        He had the right to refuse to work on any particular assignment offered to him. 

Controversially, the Full Federal Court had previously held Mr Rossato was not a casual employee by looking at the ‘practical reality’ of his employment arrangement rather than the terms of his employment contracts. The High Court overturned this decision and held that the correct test for ascertaining whether an employee is a casual is whether there is a firm and enforceable advance commitment to future work and stated where there is an employment contract, the advance commitment should be found in the terms of the contract. 

This means aviation operators can be assured that where they employ pilots and engineers as casuals, those employees will be casual employees if their employment agreements identify them as casual employees and provide no firm commitment to future work. 

In light of this decision, aviation operators should review their casual employment agreements to ensure casual employees are:

·        identified as casual employees in the agreement;

·        able to elect to accept or reject work under the terms of the agreement;

·        being correctly paid casual loading (25% under the Air Pilots Award 2020); and

·        working under an agreement that separately identifies the casual loading amount.

In addition, operators should be reminded that the Fair Work Act 2009 requires employers to:

a.      provide casual employees with a copy of the Casual Employment Information Sheet at the commencement of their employment and provide existing employees with the CEIS as soon as possible after 27 September 2021 (or 27 March 2021 for small businesses); and

b.      assess whether casual employees employed before 27 March 2021 are eligible for conversion to part or full time employment by 27 September 2021 and assess other employees within 21 days of their 12 month service date.