Casual employment has had a difficult history in the law, swinging between common law and statutory regulation in recent years. Further changes will come into force from 26 August 2024. The essential feature of casual employment is its inherent uncertainty, whether in the hours required or when work is required. If it is not known from week to week whether an employee will be needed or how many hours of work they will be needed for, then their employment is usually casual in nature. If a person is going to be needed to work the same hours at the same times for an indefinite period, the employment is usually not casual. As the old Jeep ad went, “it’s not brain surgery Brian”.
Historically, most casual employees have worked in industrial award or enterprise agreement covered non professional work. This led to greater regulation of casual employment conditions and the emergence of a line of case authority in the industrial tribunals that it was sufficient for an award worker to be described as a casual and paid a casual loading even if they were effectively working full time hours (eg Telum Civil (Qld) Pty Ltd VS CFMEU (2013) FWCFB 2434). However, this line of authority was overturned by several Federal Court decisions towards the end of the last decade which returned the law of casual employment to its common law roots with the defining element being uncertainty (Skene v WorkPac Pty Ltd (2018) 264 FCR 536 and Workpac Pty Ltd v Rossato [2020] FCAFC 84). This mean’t that each situation needed to be judged on its own merits, which itself led to uncertainty. Ultimately, the High Court became involved and confirmed the importance of the written contract in two decisions which adopted a legalistic approach to the issue (WorkPac v Rossato & Ors [2021] HCA 23 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2).
The Morrison government legislated this black letter approach in 2021 and the Fair Work Act (FWA) was amended to specify that a person was a casual employee if they accepted an offer of employment on the basis the employer made “no firm advance commitment to continuing and indefinite work according to an agreed pattern of work”. This was decided by reference to 4 exclusive statutory factors. How the relationship worked in practice was not a relevant factor. The rate of casual employment in Australia has increased markedly over the years, probably because it is considered “cheaper” to employ (and get rid of) casual staff (although this is often a misconception). This has brought increasing focus on the inequities of “permanent” casual employment and the union movement has been active in seeking enhanced security of employment. This is reflected in the latest amendments to the FWA which will make “permanent” casual arrangements more difficult.
The Albanese government is implementing a hybrid arrangement relying on both statutory and common law factors. The definition of a casual employee still relies on the absence of a firm advance commitment to continuing and indefinite work (as well as a casual loading). However, this is now to be assessed on the basis of the “real substance, practical reality and true nature of the employment relationship”. Whether or not a firm advance commitment exists is not restricted to looking at the written contract but also requires assessment of any mutual understanding or expectation between the employer and employee not rising to the level of a contract term. This can be inferred from conduct after entering into the contract of employment or from how the contract is performed. Consideration is also to be given to:
a. the inability of the employer to offer or not offer work and the employee’s inability to elect to accept or reject work (and whether this occurs in practice);
b. the reasonable likelihood of future availability of work;
c. whether there are full or part time employees performing the same kind of work;
d. whether there is a regular pattern of work for the employee.
No single consideration is determinative and it is not necessary to satisfy all considerations for employment to be regarded as non casual. A pattern of work can be regular even if not absolutely uniform and can include some fluctuation or variation over time. Casual employment cannot be for a fixed term. Disputes about these matters can be dealt with and determined by the Fair Work Commission.
The lesson is that employers should consider their genuine business needs from the outset before making a decision to classify a certain job as “casual” and include only those jobs that involve inherent uncertainty. Only time will tell whether the changes strike a balance between simplicity and fairness. It may not be a horror story but two things are likely – employment lawyers will have nightmares advising clients and the Fair Work Commission is likely to need more Commissioners.
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