In November 2016 the Federal Circuit Court handed down a decision in Skene v Workpac Pty Ltd [2016] FCCA 3035. The Court found that an employer must compensate its casual employee for annual leave to which, the employee was entitled despite his casual status and additional hourly payments made in lieu of that leave.

Mr Skene was employed as a truck driver in a Rio Tinto coal mine in Queensland for a continuous period of over a year and regular working hours during seven days’ shifts were set 12 months in advance.  Mr Skene lived in accommodation provided free of charge by his employer and used fly in, fly out arrangements also provided by the employer.  According to the Court, all these were characteristics of a permanent employee.  However, Mr Skene’s employment contract (the Contract) referred to him as a casual employee and both parties considered the employment as casual,he was paid by the hour through his weekly timesheets and his employment was terminable on one hour’s notice.

The Court had to decide if Mr Skene was entitled to paid annual leave, meaning the Court had to consider if he was in fact a permanent or casual employee.  The terms of the enterprise agreement and the Contract stated that only a permanent employee was entitled to a paid annual leave.  Neither the enterprise agreement nor the Contract defined or sufficiently defined a permanent or casual employee.  The Judge looked into the contractual terms and subjective intentions of the parties, and concluded that Mr Skene was a casual employee, and therefore, was not entitled to annual leave.

The next question considered by the Court was whether Mr Skene was entitled to annual leave under the Fair Work Act 2009 (Cth) (the Act).  The Act, does not define a casual employee.   The Judge did not take into account the casual status of the employment under the enterprise agreement and the Contract, but took guidance from several court cases and concluded that Mr Skene was not a causal, but rather a permanent employee under the Act and was entitled to annual leave.  It is understood that the employer is seeking to appeal the decision.

When employers intend to provide work or employ staff on a casual basis, it is important to ensure that terms of an employment contract and all communications between the employer and the employee sufficiently describe a casual status of employment. Nevertheless, on the basis of this recent court decision casual roles which have characteristics of permanent employment may be considered permanent under the Act, and employee entitlements like annual leave may arise.

Natalya Boyarkina