Following the High Court’s decision in Rossato last year and the legislative amendments to the Fair Work Act 2009 (Cth) (FW Act), employers were relieved to have some clarity over the common law and statutory definitions of casual employment. However, a slew of recent decisions has brought casual employment back into the industrial spotlight, specifically in relation to the way casual employment is terminated in the context of labour hire organisations. These decisions come at a time when the Labor Government has indicated that the labour hire industry is going to be a key area of focus at the upcoming Jobs Summit which is likely to result in further legislative change to casual employment.
Termination of assignment, not employment
The Fair Work Commission (FWC) in Jordon v Allstaff Australia Sydney Pty Ltd [2022] FWC 1607 (Jordon) dismissed an applicant’s general protections claim because it found the employee had not been dismissed. The applicant was a casual employee assigned to work at a Woolworths site. Following a non-work related injury, the employee notified the employer he was ready to return to work. After receiving independent medical advice, the employer formed the view it was not possible for the employee to return to his assignment with Woolworths and sent the employee a text message to tell him his assignment had been terminated. The employee’s contract contained a clause which stated that the termination of an assignment did not mean the termination of the employment, which the FWC acknowledged. The FWC also noted there was no evidence to suggest the employer wasn’t still prepared to continue the employment relationship and assign the employee further work from time to time. On this basis, the applicant’s casual employment had not been dismissed, even though his assignment had been terminated.
Similarly, in Patterson v NX Blue Pty Ltd, George Ayoub, Salini Australia Pty Ltd [2022] FWC 1590 the FWC dismissed an applicant’s general protections claim which was made following the employee’s demobilisation from the Snowy Hydro project. In considering whether the employee had jurisdiction to make the application, the FWC considered whether the employee had been dismissed. Like in Jordon, the employee’s contract confirmed the termination of an assignment was not the termination of employment without express written notification. As no such notification had been given, the FWC found the employee had not been dismissed.
Termination of assignment and employment
In contrast, the FWC in CEPU v AusTunnel Pty Ltd, SLC Snowy Hydro Joint Venture T/A Future Generation JV [2022] FWC 1655 (Austunnel) found two casual labour hire employees had been dismissed. The FWC found the employees’ contracts were tied to the project, meaning when their assignment on the project came to an end, so did their employment.
In Fox v Programmed Integrated Workforce Ltd (No. 2) [2022] QIRC 281 a casual employee made a claim for payment of their accrued long service leave entitlements (LSL). In determining whether the LSL was payable, the Queensland Industrial Relations Commission (QIRC) considered whether the employee was dismissed. The employer was unsuccessful in re-tendering for a contract to provide labour to the Brisbane City Council (BCC). As a result, it emailed its casual employees, including the applicant, to inform them of the end date of the BCC contract. The QIRC found the terms of the applicant’s employment contract empowered Programmed to terminate the employment relationship and did not refer to Programmed’s ability to terminate an assignment. The QIRC, having regard to the drafting of the employee’s contract, the communication sent to the employee and failure to offer any alternative work, determined the email to be the employer’s termination of the employees’ assignment with BCC and the employment relationship.
Should you address the termination of assignment in casual labour hire contracts?
The answer to this depends on the needs of the on-hire provider and its clients. There will be circumstances where a labour hire provider intends for the completion of an employee’s assignment to mark the end of the employment relationship. However, there will be other circumstances where the employer intends for the employment relationship to continue after the casual assignment has ended. The above decisions highlight the importance of labour hire providers carefully drafting casual employment contracts as the consequence of getting it wrong will impact on whether a casual employee’s employment has been terminated or not.
When is it beneficial for a labour hire provider to include provisions distinguishing the end of an employee’s assignment from the end of the employment relationship?
In many cases a labour hire provider will want the employment relationship to continue after an employee’s casual assignment with a client ends. This allows for flexibility for the labour hire provider to continue to place the casual employee on other client sites/assignments without having to issue a new employment contract on each occasion.
The purpose of such contract provisions is to contemplate that an employee may be demobilised from a particular site without interrupting the broader casual employment relationship. The flexibility to assign casual employees across more than one client site is usually beneficial to labour hire providers and their clients.
In the absence of a positive act by the employer to bring about the termination of the employment relationship, the casual employment contract and relationship continues, with the prospect remaining of the labour hire provider offering work to the employee at any time.
Should labour hire employers include express termination clauses in their casual employment contracts at all, beyond the right to terminate for serious misconduct?
From a statutory perspective, the casual definition inserted into the FW Act confirmed that each occasion a casual employee is engaged represents a separate contract of employment, which may be on a single shift basis, or any other agreed short-term period. On this basis, the engagement of the casual employee ceases at the end of each discrete shift or agreed period.
It is therefore technically not necessary to include termination provisions in a casual employment contract as the casual employee is engaged on an ad hoc basis with no firm advance commitment to continuing work. In practice, some employers include termination provisions in an attempt to provide clarity around when the employment contract and relationship will come to an end. It is common for the termination clause to simply state that the casual employment can be terminated without advance notice or by the giving of one hour’s notice.
From a common law perspective, where an employment contract includes a term tying the employment to a specific project/assignment, as in Austunnel, the demobilisation of a casual employee from a particular site is likely to also terminate the employment relationship.
These recent decisions indicate that the great casual debate is far from over and the issue will take centre stage at the Labor Government’s upcoming Jobs Summit and be the subject of ongoing legislative reform.
Key takeaways for employers
Labour hire employers need to be acutely aware of the purpose for which they are engaging a casual employee prior to committing the terms of the relationship to writing. We recommend labour hire employers:
- conduct a review of their casual employment contracts to identify if they are project specific or allow the employer to assign the employee to any of its clients as required
- consider in what circumstances a casual employee might need to be notified of their demobilisation from a particular site as opposed to there simply being no requirement to engage them for a further shift (e.g. are they a FIFO worker? Is the client likely to spill the beans and tell the employee they are being demobilised? Is the contract due for tender soon?)
- consider if there is a potential need to notify a casual employee of the termination of an assignment with a specific client and if so, ensure the employment contract clarifies their employment is not confined to one client or site and they may be assigned elsewhere;
- deliver refresher training to managers/supervisors who are responsible for communicating with labour hire employees to ensure they are aware of how to communicate with a casual employee who has been demobilised from a client’s site.
If you’d like to hear more about what we have to say about casual employment and the labour hire industry, you can join us at the Kingston Reid Jobs Summit Fringe Festival being held in Canberra on 31 August and 1 September 2022 here.