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  • The Full Federal Court has confirmed that the common law definition of ‘casual’ applies for the purpose of the National Employment Standards.
  • Casual employees must have no firm advance commitment as to the duration of their employment or hours to be worked.
  • The issue of whether a casual loading may be set off against liability for annual leave remains open.

The Full Court of the Federal Court (‘Court‘) in WorkPac Pty Limited v Skene [2018] FCAFC 131 (‘WorkPac v Skene’) has upheld a decision that an employee – who was described as a casual but worked a regular roster set a year in advance – was a permanent employee. As a consequence, the employee was entitled to annual leave under both the National Employment Standards (‘NES’) and the enterprise agreement which applied to his employment. The decision has significant and widespread implications for the labour hire industry, users of labour hire services and employers with ‘casual’ employees.

The Court’s decision confirms that whether an employee is a casual or permanent for the purposes of the Fair Work Act 2009 (Cth) (‘FW Act’) is determined by reference to the common law definition of ‘casual employee’ i.e. the employee must have no firm advance commitment as to the duration of their employment or the days (or hours) worked.

Casual employees are not entitled to a number of benefits under the FW Act, including paid leave, notice of termination, redundancy pay and paid public holidays. As a result, the mischaracterisation of an employee can result in an employer facing significant liabilities, even where the employee is paid a casual loading to compensate for the lack of those entitlements.

The decision leaves open the capacity of an employer to ‘set off’ the liability for leave or other benefits against the casual loading paid to an employee, where such loading is clearly expressed as an identifiable amount.

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