Unfair dismissal case raises questions about what a casual worker really is

The latest case on the meaning of a ‘casual employee’ for the purposes of the unfair dismissal regime is likely to lead to more rather than less confusion over this important issue.

In the case of Ponce v DJT Management, DJT Management claimed that Fair Work Australia (FWA) had no jurisdiction to hear Ponce’s unfair dismissal claim as he was a casual employee. Under the Fair Work Act 2009, a casual employee does not have unfair dismissal rights unless:
(a) the employee has regular and systematic employment; and
(b) the employee has a reasonable expectation of continuing employment on a regular and systematic basis.

DJT Management argued that Ponce’s employment did not satisfy the above test.

The evidence revealed that Ponce worked for DJT Management as a traffic controller for a period of approximately 18 months. The Respondent provided him with work when its contractual obligations generated a need for his services. While he mostly worked on the same days of the week, the number and spread of hours varied (although during times of night shift the hours worked formed a stronger pattern). In addition, the availability of work was communicated to him on a regular basis, usually daily but weekly when he was on night shift. Mr. Ponce was entitled to take work elsewhere, but he declined to do so, and relied on DJT Management as his sole source of income.

Many businesses would assume that an employee in Ponce’s position was a typical casual who could not take action for unfair dismissal. Although he generally worked on regular days, his hours varied greatly, he was free to take work elsewhere, and the offer of work was communicated to him on almost a daily basis.

However, Commissioner Roe determined that Ponce did have an entitlement to lodge an unfair dismissal claim. The Commissioner interpreted the tests to be applied in the following way:

• The employer regularly offers work when suitable work is available at times when the employer knows that the employee has generally made themselves available; and
• Work is offered and accepted sufficiently often that it could no longer be regarded as simply occasional or irregular.

Think about it for a minute. Most employers utilise casual labour when work flow is variable. That means that the offer of work turns on ‘suitable work being available’. This is generally regarded as one of the hallmarks of casual employment. According to Commissioner Roe, this is evidence that the employee is being provided with regular and systematic employment.

And why is it relevant that the employee has ‘made themselves available’? Most employers accept that casual employees are entitled to work elsewhere when they can’t provide work to the employee. The fact that an employee ‘makes themselves available’ is a matter for the employee, and shouldn’t be a matter which is relevant to the employee’s right to bring an unfair dismissal claim.

Unfortunately, the decision is unlikely to be appealed because Ponce’s situation is undoubtedly a borderline one: he did work regular days and many of his shifts fell into a regular pattern. However, if Commissioner Roe’s test is applied in less borderline cases it will be unlikely to survive the scrutiny of the Full Bench on appeal. Commissioner Roe’s test, with respect, just doesn’t reflect the reality of workplace practice.

In the meantime, the lessons are clear for employers:

• Manage casuals carefully to ensure they are truly casual under the Fair Work Act unfair dismissal regime – in particular, avoid work falling into routine patterns, and ensure employees are regularly told that work is irregular and cannot be guaranteed in the future;
• Put processes in place to prevent unwitting oversights – review the work patterns of all casual employees regularly;
• If there is a genuine need for a continuous employee, make him or her permanent; and
• Use third person based labour hire arrangements where possible.

At the end of the day, Australian management has for far too long relied on casuals as a quick fix for workload fluctuations. There are so many other ways to cook the goose – the use of fixed-term or specified task employees, or the use of labour hire should always be considered.

Andrew Douglas is the Managing Director of Douglas LPT, an integrated legal, HR, recruiting and training business. He is the Editor-in-Chief of the loose leaf publication, The OHS Handbook, and writes on workplace law issues such as Industrial Relations, Employment law, OHS, Equal Opportunity, Privacy, Surveillance and Workers Compensation. He is the principal of the legal division of Douglas LPT and appears in courts, tribunals and Commissions throughout Australia.