New rules for casual drivers
THE landscape of truck driver employment has changed forever, following a recent judgment of the Federal Court of Australia.
The judgment will have little bearing on the majority of truck drivers who are employed permanently either under award conditions or with EBAs, with holiday pay, superannuation and other benefits.
But things will change significantly for the large sector of the driving community working under casual work agreements.
And employer associations are not happy about the Federal Court judgment.
"Double dipping” they cry in the business press, saying the truck driving judgment will affect the employment of casual workers across the board, in retail and hospitality.
One business newsletter reported: "The Australian Chamber of Commerce and the AI Group claim potential side effects of the ruling have the potential to cost businesses 'billions' of dollars”.
"Dynamite consequences for businesses employing casual workers,” cried another business journal, claiming small and medium enterprises could be liable for millions of dollars in back payments.
Many truck drivers, both in distribution and long haul, are employed under casual employment agreements.
Casual employment agreements are common with labour-hire companies that supply flexible or short term demand for drivers to many big transport companies, including Toll.
Casual employment appeals to some drivers who enjoy the flexibility available to both the driver and the employer.
But there have been many cases of abuse of the casual employment system by employers made public over the years.
With a pending election, Brendan O'Connor, the shadow industrial relations minister, has the cross-hairs on the labour-hire business if Labor wins government this year and likely a review of casual employment will be part of his new remit.
In the recent court cases and appeals, it became clear that there is not an accepted fit-all definition of just what is a casual worker.
Casual Employment under the Fair Work Act
Under the Fair Work Act there are three types of employment: permanent, permanent part-time and casual.
According to the Fair Work Ombudsman, a casual employee does not have a firm commitment in advance from an employer as to how long they will be employed for.
A casual employee has no guaranteed hours of work, usually works irregular hours, doesn't get paid sick or annual leave, can end employment without notice unless notice is required by a registered agreement.
Casual employment is different to full-time or part-time employment where employees have ongoing employment or a fixed-term contract and can expect to work regular hours each week.
They are entitled to be paid sick leave, annual leave and other benefits.
Casual employees are entitled to a higher hourly pay rate than equivalent full-time or part-time employees called a "casual loading” and is paid because they don't get benefits such as sick or annual leave.
A casual employee can change to a full-time or part-time employment at any time if the employer and employee have both agreed to it.
But a grey area has emerged when casual workers are employed in regular time schedules over extended periods of time.
This mid ground came under the magnifying glass in the recent court judgment and the courts identified an additional employment category the courts have named "other than a casual employee”.
So what's this all about?
When is a casual employee not a casual employee?
That's what this court case was all about.
Truck driver Paul Skene took a job as a dump truck operator and was employed by labour-hire company WorkPac Pty Ltd.
During 2010 he worked on the Anglo Coal operation in the company's Central Queensland operation.
From April to July in that year he worked a seven-day-on, seven-day-off work schedule in a drive-in-drive-out arrangement.
That meant that Skene had a six-hour drive to and from work for each seven-day stint.
Unhappy with that arrangement, he applied for another position with WorkPac.
His job was again as a dump truck driver at a Rio Tinto mine near the Queensland town of Clermont.
This time the job was fly-in-fly-out, a better arrangement for Paul Skene as he held this employment from July 2010 until April 2014 when he was terminated by WorkPac.
On termination he asked for payment for accrued annual leave.
WorkPac refused the payment on the understanding he had been employed on a casual basis.
Eventually Paul Skene, through his lawyers, took WorkPac to court claiming the unpaid holiday pay for the period of his employment.
His lawyers claimed that, by law, he was employed by WorkPac on a full-time permanent basis and that he was entitled to annual leave when his employment came to an end in 2014.
Defending the matter in court, WorkPac claimed Skene was a casual employee and not entitled to annual leave and other entitlements.
The court found, under the Fair Work Act, that Paul Skene's employment was as "other than a casual employee” and ordered that WorkPac pay the driver nearly $28,000 in holiday pay and interest on monies owed.
The WorkPac Appeal
WorkPac then appealed the decision to the Federal Court of Australia.
The company contested the court's findings on one ground: that Skene was actually a casual employee under the Fair Work Act.
WorkPac sought orders setting aside the original court's decision to pay compensation to the driver and to dismiss the driver's application.
Three senior judges sitting on the full bench of the Federal Court delivered a 70-page judgment taking in convoluted legal argument and dredging up a quagmire of legal precedents of previous employment and work-related cases.
The Federal Court confirmed that the correct definition of Paul Skene's employment status was that he was a worker who was "other than a casual employee”.
It seems there is no category for casual employment that has regular shifts over long-term employment.
On August 16, 2018, the court ordered that WorkPac's appeal be dismissed and the company was ordered to make the payment.
Paul Skene's counter appeal was allowed.
This was the judgment that opened the can of worms that created hysteria among some employer groups relying on casual employees.
Undoubtedly the judgment will lead to a review and amendments to the Fair Work Act and possibly a new employment category to replace the legal system's "other than a casual employee”.