The whole question of whom is a casual employee in Australia is in a state of confusion ever since the Full Court of Federal Court in 2018 decided to fundamentally change the pragmatic approach of the Fair Work Commission. The Full Court decided to essentially find that any casual employee with a reasonable expectation of on-going employment is really a permanent employee.
Well as of a week ago, the Government has added to the confusion by making the term long term casual
a critical threshold issue for tens of thousands of businesses across the country. Employers now must decide which of their (often non-working) casual employees, they are going to pay; hoping that the Government will reimburse them for those payments, with the JobKeeper subsidy.
The problem is that the ATO may have a different view at the end of April, as to which casual employees are eligible. As such, the employer will be left out of pocket for payments made to those ‘ineligible’ casual employees in April. Worse still, the ATO may be directed in a year’s time, by a cash-starved Government, to conduct audits on employers re the JobKeeper subsidy. If the ATO then decided that a number of casual employees for which it provided the JobKeeper subsidy were not really eligible, the ATO could demand that the employer repay the cumulative subsidy (of $1,500 per fortnight) over a 4-5 months for multiple casual employees. Across, ten such ‘ineligible’ casuals – that could total $150,000.
We would like to say such a nightmare scenario is easily avoided because the law is clear as to definition of long term casual – but that simply is not the case.
The answer as to which casual employees are eligible to participate in the JobKeeper scheme turns on which casuals (with a service of more than 12 months) classify as having worked on a ‘regular and systematic’ basis
as at 1 March 2020.
So what exactly does that phrase mean?
Well, such is the state of the law, employment lawyers are simply not able to advise with exact certitude where the ‘line’ is between a casual employee (via their employer) being ’entitled to JobKeeper’ versus being stood down without pay.
Despite this we give you some general guidelines to navigate what is for many businesses (ie. cafes and restaurants) an almost existential question.
These statements (or endorsements of early judicial statements) by the Full Bench of the Fair Work Commission in a decision in late January 2020, may assist you:
- Firstly, the word ‘regular’ is not referring to the specific hours the casual may work each week; rather that they are working in that roster period at all.
- Also, the word regular means repetitive – rather than ‘frequent’ of ‘often’.
For example, in that decision, the casual employee worked 3-4 shifts per week for only 30 weeks in a 12 months period. Yet, it was held to be regular.
What about ‘systematic’
? The Full Bench held that it implied an arrangement that could fairly be called a system, method or a plan. In that same decision, the Full Bench of the Fair Work Commission held that the two features of the casual arrangement that supported their finding that it was systematic
- The casual employment was the subject of a single and ongoing writing contract, i.e. the employee was employed to work in a position in the company’s operational structure in accordance with a pre-established and ongoing framework of legal obligations.
- The evidence before the Commission in this case demonstrated that, for the most part, the employee’s employment was the subject of a monthly roster system involving the employee indicating in advance their availability to work for the month.
For those two reasons, the employee in that case was entitled to hold a reasonable expectation that their employment would continue on a regular and systemic basis.
Whilst it is no easy matter to distill clear criteria clarifying with certitude which casuals qualify under this test, some further identifiers include:
Factors against the employee’s casual arrangement being considered as reasonable and systematic
- Each engagement of the employee is subject to a different contract, i.e., if an employee was only hired for an event, which was not a recurring event.
- If the number of hours worked are small, and the gap between days and times worked is long and irregular. For example, if an employee only works when they request a shift and those shifts are irregular and there are large gaps between the times of shifts. (However, note that the Fair Work Commission found the casual arrangement where an employee worked 33 weeks out of 84 weeks at an average of 4.67 hours per week was reasonable and systematic.)
- The employee had another principal job with another employer.
None of these are definitive in themselves but have been held to contribute to the view that the casual arrangement was not
regular and systematic.
Factors supportive of the employee’s casual arrangement being considered as reasonable and systematic
- The (almost) weekly nature of the work, albeit different shifts each week
- The casual employee carrying out similar functions each time
- The employee generally makes themselves available for each roster.
- It is the employee’s only job.
- There was one contract employing the worker (as a casual).
- The employee has a reasonable expectation of ongoing work.
- Though working seasonally, the casual employee depends on the contract work
If these principles seem vague and unsatisfying, you are justified in that sentiment. The current state of the law around the casual status of employees is a mess. We await the High Court rescuing employers from this confusion.
None of that is of comfort when employers are being asked to spend money paying a wage to a casual employee who is stood down – with no certainty of being reimbursed by the ATO.
Post by Warwick Ryan