A recent decision by the Full Federal Court in Workpac Pty Ltd v Skene [2018] FCAFC 131 has transformed the way employees are classified as “casual”.

This case confirmed that a casual employee is defined by the nature of their work, including the days and hours worked, rather than the way they are classified in their employment contract.

For example, if an employee is defined as a “casual” in their employment contract but works hours that reflect a full-time employee, that employee may be classified as a full-time employee at law. This would make their employer liable to pay annual leave and sick leave to the employee at the higher “casual” rate of pay.

While the case leaves open the ability for an employer to pay casual loading in lieu of leave or other benefits, this casual loading must be clearly expressed as an identifiable amount in the employment contract. However, even if the casual loading is clearly documented, a “casual employee” may still be classified as a full-time or part-time employee if their hours of work reflect this.

This decision is likely to have significant implications for “casual employees” who are paid casual loading in lieu of leave, as those employees may still be able to claim annual leave and sick leave at that higher rate of pay. A “casual employee” may be able to double dip by being paid at a higher rate in lieu of leave, and then later claiming leave entitlements.

If you are a business who employs a large number of casual employees, we recommend you seek advice from our commercial team on the implications of this decision on your business.

If you are an employee engaged on a casual basis and are unsure of your rights or entitlements please contact us on (02) 9523 5535.

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