Horse enthusiasts and businesses, from serious amateur/professional riders to agistment centres, riding schools and horse studs, rely on people to help them with their horses.  Help is seldom free.  Labour rates by the hour are normal. Once agreed, the arrangement is usually a happy one.  But sometimes it is not: There is a lot of hard work to do, long hours and with time the relationship can sour. The employee also might just want to move on.  If the parting of ways is acrimonious, however, the employee might question if his or her proper legal entitlements were paid.  This is when it can get troublesome for the employer.

The classification of someone providing labour is an important thing in the law of employment.  Rates of pay and minimal employment conditions, for instance leave entitlements, whether under an Award or the National Employment Standards, depend on whether the individual is an employee or not and if so, what type of employee.

In industries like transport, agriculture, food services and marketing, employers have attempted historically to avoid employee compliance costs (like the superannuation guarantee levy and leave entitlements) by employing labour on an independent contractor basis. These arrangements are often found by the Courts (and the Taxation Office) to be shams, being unlawful attempts to evade employee compliance obligations in order to reduce the cost of doing business.  Over decades, the Courts have refined the indicia to decide if an individual is an independent contractor or an employee at law.

Just as an attempt to constitute an individual an “independent contractor” as opposed to an “employee” often courts controversy, so too can an attempt to classify an employee as “casual” as distinct from “part-time”.

The classification of an employee as a casual is endemic in the horse industry.  As the hours of work are irregular, not guaranteed, and intermittent, employers readily assume that the employee is a ‘casual’.  The fact that casual employees have no entitlements to sick leave and annual leave no doubt pulls towards this assumption.  In lieu of such leave entitlements, casuals are entitled, however, to a loading on their hourly pay rate.

It may sound surprising that even if the employer and the employee agree on a casual categorisation of the employment relationship, the law can reclassify the relationship as part time if its characteristics match part-time employment and not casual employment.

According to a decision of the Full Federal Court in WorkPac Pty Ltd –v- Skene on 16 August 2018, a number of indicia are relevant to the characterisation at law of someone as a casual employee or a part-time one.  These indicia include the regularity of work patterns, the certainty of work, the continuity of service, the intermittency of work and its predictability.

In the WorkPac case, Mr Skene was employed as a casual employee on a fly in fly out basis as a dump truck operator at a coal mine operated by Rio Tinto.  His assignment was originally for 3 months but it last lasted 22 months, his work was regular and predictable on a 7 days on 7 days off rostered basis. He was expected to be available to Rio Tinto on an ongoing basis, the nature of his work did not fluctuate and his hours of work were regular and certain.

The Court held that Mr Skene was entitled to annual leave even though he considered himself a casual employee, he was paid by the hour and his employment could be terminated on one hour’s notice. In this case, the fact that Mr Skene was paid a casual loading was not determinative of his right to annual leave.

If, according to law, an employee’s work arrangement, viewed objectively, is not ‘casual’ by its nature, a valid claim for annual and sick leave entitlements can exist.  In addition, failure to provide such entitlements is a contravention of the law and can result in penalties. Ignorance of the law is no excuse.

As a rough measure, if a stable or farmhand has worked regular hours on a continuous and predictable basis, then after about 3 months there is a risk that the individual has morphed into a part-time employee from a casual one.  Employment disputes are best avoided to minimise the risk, on a review of the work arrangement by the employee’s lawyer or Fair Work Australia, of a claim for unpaid entitlements and possible imposition of penalties for breach of workplace laws.

The legality of employment arrangements is important.  All employers, be they business enterprises or mums and dads, run the gauntlet if the management of employees starts or continues on the wrong legal footing.  Legal advice should be sought about circumstances which might indicate that an employee should no longer be categorised as a casual.

10 December 2018

© 2018 Michael Mackinnon, Solicitor & Independent Counsel