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Absence of workplace agreement means ‘casual’ employee wins annual leave entitlements

Submitted on Thursday, 15th March 2018

The Federal Circuit Court of Australia (the “Court”) has declared a ‘casual’ employee of 15 years was in fact a full time permanent employee entitled to payment of accrued annual leave for the duration of his employment as well as a payment in lieu of notice

The employee was engaged with the business as a crushing plant operator in May 2000, however no written employment agreement was created. The employee was dismissed from his employment in August 2015.  The employee made a claim in which he argued: he was a permanent employee and entitled to accrued annual leave, a payment in lieu of notice, and a redundancy payment; and his dismissal constituted adverse action because of his physical disability and previous and prospective workers’ compensation claim.

The employer attempted to defend the claim by arguing the employee was a casual employee for the duration of his employment. In determining the employment status of the employee the Court considered the applicable Industry Award, the Australian Workplace Agreement (“AWA”) introduced in 2007 as well as the practices adopted by the employer and employee.

The employer argued the employee was a causal as he received a casual loading.  However, when considering the applicable Industry Award the alleged loading was insufficient. The employee conceded he had no recollection of taking personal leave, annual leave or being remunerated for public holidays. The employer argued such an arrangement was consistent with a causal employment relationship.

The Court concluded for the duration of the employee’s employment both parties were under the misapprehension the employee was a casual. However, having regard to the regular and systematic nature of the arrangement and the definitions of casual employment contained in the Industry Award and AWA the employee was a permanent employee. It followed the employee was entitled to annual leave and a payment in lieu of notice.

Turning to the dismissal, the employee argued it constituted adverse action because of his injury, a past workers’ compensation claim and/or a potential workers’ compensation claim. When considering whether or not the employee’s dismissal amounted to adverse action the Court noted “[A] consideration of whether there has been discrimination against the [employee] because of his disability requires consideration of whether the [employee] would be unable to carry out the inherent requirements of the particular work, even if the [employer] made reasonable adjustments”.  The Court also considered the Disability Discrimination Act 1992 (Cth)  which confirms it is not unlawful for a person to discriminate against another on the grounds of disability if because of that disability the person is “unable to carry out the inherent requirements of the particular work, even if the relevant employer…made reasonable adjustments”.

The Court noted prior to the employee’s dismissal the employer engaged an occupational physician to conduct a fitness for work assessment.  The physician confirmed the employee suffered from rheumatoid arthritis and “was not physically capable of doing this kind of work in August 2015, because it was simply too manually and physically difficult, and his work would not have been safe for his medical condition”. The Court accepted the physician’s opinion it would not be feasible for the employee to return to his role as no realistic adjustments could be made. The Court accepted the employee’s employment was terminated due to the fact he could not safely perform the duties of the role, if at all.

The Court will reconvene in May to make further ruling regarding the payment and interest owed by the employer.

This decision highlights the importance of having up to date employment contracts and maintaining accurate records. In this legislative climate employers need to be aware of their obligations and responsibilities to employees. Employers must comply with all relevant legislation and it is their duty to be informed on such topics. The Victorian Chamber is able to provide sound contracts to employers to ease the burden of creating a legally binding agreement.

Understand your minimum obligations for the workplace relations regulations by attending our Know your award training. The training will increase your knowledge of common clauses within modern awards, and assist in classifying your employees within the modern award system.

Written by Nicole Pritchard

Federal Circuit Court of Australia  [2018] FCCA 279

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