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Workplace Relations

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Focus: Workplace Relations

31 July 2009

In this issue: we look at what defines a casual employee; bargaining under the new Fair Work Act; a case dealing with the recognition of casual work for the calculation of employment service; and changes to anti-discrimination/disability legislation.

A permanent or casual

In brief: The casual or permanent status of an employee does not depend entirely of the terms of the employment contract. Lawyer Nicole Winton reports on a recent decision of the Federal Magistrates Court of Australia.

How does it affect you?

  • When casual employees do not work on an informal, uncertain or irregular basis they may be truly permanent and entitled to corresponding employee benefits such as annual leave.
Background

Mr Williams was employed as a casual, fly-in fly-out worker by McMahon Mining Services. He worked 12-hour shifts on a two weeks on/two weeks off roster at a remote mine. His contract of employment provided that his 'rate of pay is all inclusive ... and as a casual employee [contains] a loading in lieu of paid leave entitlements.' 1 Despite that term, Mr Williams claimed annual leave entitlements after his termination on the basis that, as his shift work was regular, formal and certain, he was, in reality, a permanent employee.

The decision

Federal Magistrate Lucev agreed with Mr Williams, however he allowed the defendant to set off the annual leave entitlements against the leave-loading previously paid to Mr Williams.

In coming to this decision, Federal Magistrate Lucev first examined whether Mr Williams was a casual employee according to general law principles, noting that 'it is the informality, uncertainty and irregularity of the engagement that gives it the characteristic of being casual.' 2 He found that since Mr Williams' work was performed according to a stable, organised and certain roster, with certainty of working hours throughout the term of employment, he was not a casual worker.

Federal Magistrate Lucev then turned to the applicable legislation and confirmed that there was nothing there that altered the general law position.

This case highlights the risk of assuming casual employment based on the style of engagement and mode of remuneration. If the employee has regular, formal and certain working conditions, the risk is that benefits available to permanent employees are accruing and may be the basis of a claim.

Fair Work Act is underway

In brief: Lawyer Andrew Stirling reports on some of the consequences for employers involved in enterprise bargaining since the Fair Work Act 2009 commenced on 1 July 2009.

How does it affect you?

  • Employers should review which Awards, NAPSAs and transitional agreements cover their employees.
  • Be prepared to comply with the bargaining requirements of the Fair Work Act 2009 (Cth), even if you started bargaining before 1 July 2009.
  • Some parts of the Fair Work Act are still to commence on 1 January 2010. Employers should consider in advance how these changes will affect them.
Details

On 1 July 2009, the Fair Work Act commenced.

Employers engaged in enterprise bargaining now, or in the future, should take the time to review their industrial position under the Fair Work Act. In particular, employers who were engaged in enterprise bargaining before the new legislation commenced should be aware that unions can now apply for good faith bargaining orders despite substantial progress being made between employer and employee before 1 July.

In one recent case, Fair Work Australia made a good faith bargaining order requiring an employer to meet with a trade union even though the employer had all but finished negotiating an enterprise agreement. It had been negotiating with employees directly (without the union's involvement) since April 2009. The employer was ordered to meet with the trade union to discuss the union's proposals, and to delay a planned employee ballot.3

Employers should make sure that they are aware which transitional instruments cover and apply to their employees. Potential areas for confusion include employers whose pre-WorkChoices industrial instruments did not become transitional instruments, or transitional instruments that have subsequently become defunct.

Determining what transitional instruments cover an employment relationship is particularly important for determining:

  • the benchmark for the 'no disadvantage' test; and
  • whether a Modern Award will cover the employer from 1 January 2010. Modern Awards will not cover an employee who is bound by an enterprise award or enterprise NAPSA. It is important to note that, because of WorkChoices transitional provisions, an enterprise award-based instrument may no longer operate and a Modern Award may still apply.

Casual work does not count towards continuous service

In brief: Senior Associate Jo Musk and Lawyer David Batten report on a decision of the Australian Industrial Relations Commission in which it held that periods of casual work will not count towards service when worked prior to calculating severance benefits on termination.

How does it affect you?

  • If casual service is intended to count as continuous service for the purpose of calculating severance entitlements, parties must specifically provide for this.
  • This will continue to be the case after the introduction of the National Employment Standards.
Background

The National Tertiary Education Industry Union brought a dispute with La Trobe University before the Australian Industrial Relations Commission (the AIRC) under the dispute resolution provisions of the La Trobe University Enterprise Bargaining Agreement 2004-2008. The dispute concerned whether permanent employees with earlier casual service were entitled to have their casual service recognised for the purpose of calculating long service leave and/or notice/severance payments on redundancy. 'Continuous service' was the criterion for determining entitlements but was not defined in the agreement.

Findings

The AIRC was constrained by the terms of the agreement and could not read provisions into it that were not there.4 In the absence of a definition of 'continuous service', the term should be given its ordinary meaning. The AIRC accepted that the ordinary meaning of 'continuous service' excludes periods of casual employment.

Therefore, unless an entitlement specifically provides for casual service as counting towards an accrual (eg long service leave for casuals), that casual service is ignored when calculating the accrual.

Disability discrimination claims – a hardship to resist

In brief: The Federal Government has amended the Disability Discrimination Act 1992 (Cth) to make it clear that refusal to make reasonable adjustments for people with disabilities may also amount to discrimination. Senior Associate John Naughton reports.

How does it affect you?

  • A refusal to make adjustments for people with disabilities may amount to discrimination, even if that means more favourable treatment compared with those without disabilities.
  • An employer can still decline to make the adjustment if it would amount to an unjustifiable hardship.
Background

The Disability Discrimination and Other Human Rights Legislation Amendment Act 2009 (Cth) (the Amendment Act) was assented to on 8 July 2009. The legislation amends the Disability Discrimination Act 1992 (Cth) and the Human Rights and Equal Opportunity Commission Act 1996 (Cth).

The Amendment Act effects substantial reforms including:

  • amending the Age Discrimination Act 2004 (Cth) so that a complainant need only prove that age was one reason for the discriminatory behaviour alleged, rather than the dominant reason;
  • amending the definition of 'direct disability discrimination' and 'indirect disability discrimination' to make clear that:
    • a failure to make reasonable adjustments; or
    • a proposal not to make reasonable adjustments,

can amount to discrimination (responding to the High Court decision in Purvis5)

  • removing the indirect discrimination requirement for the complainant to show that the requirement or condition imposed by the respondent is one with which a substantially higher proportion of persons without the disability comply or are able to comply; and
  • reversing the onus of proof in indirect discrimination cases – where rather than the complainant needing to prove that the requirement or condition imposed by the respondent is unreasonable, it will now be up to the respondent to prove the reasonableness of the requirement or condition they impose.
Other changes

Another significant reform relates to unjustifiable hardship. While the Amendment Act extends the defence of unjustifiable hardship to all unlawful discrimination on the ground of disability (except in cases of harassment and victimisation), the most significant effect of the reform is to make unjustifiable hardship part of the test for determining whether discrimination has occurred. In particular:

  • for direct discrimination, a failure to make (or propose to make) a reasonable adjustment to prevent the discrimination will only be a defence if the adjustment requested would impose an unjustifiable hardship on the employer; and
  • for indirect discrimination, where a requirement or condition is imposed with which the complainant could comply if adjustments were adopted, a respondent will only be able to resist a claim if these adjustments would impose an unjustifiable hardship.

Whether an adjustment involves unjustifiable hardship depends on (among other factors) the financial circumstances and the availability of financial and other assistance to the respondent. In assessing the nature of a benefit or detriment of a particular adjustment, the interests of the community, and not just the persons concerned, are to be considered. Also, as the Amendment Act shifts the burden of proving unjustifiable hardship to the person claiming it, disputes regarding the reasonableness of a particular adjustment are likely to focus on their affordability in a particular case.

Finally, the Amendment Act qualifies the 'inherent requirements' exception to make clear that it is not unlawful to discriminate on the grounds of disability in an employment context if, because of the disability, a person is unable to carry out the inherent requirements of the position even with reasonable adjustment.

Footnotes
  1. Williams v MacMahon Mining Services Pty Ltd [2009] FMCA 511 at [6].
  2. Reed v Blue Line Cruises (1996) 73 IR 420 at 425 per Moore J.
  3. Australian Municipal, Administrative, Clerical and Services Union v Queensland Tertiary Admissions Centre Ltd [2009] FWA 53.
  4. National Tertiary Education Industry Union v La Trobe University [2009] AIRC 576.
  5. Purvis v The State of New South Wales (Department of Education and Training) [2003] HCA 62.

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