December 13, 2023
Long-term casual not entitled to redundancy payment
Over the past few years, the rights of casual employees have been hotly contested in our courts, tribunals and parliaments.
A recent Fair Work Commission decision has added to the debate after ruling that a long-term regular casual was not unfairly dismissed when he was taken off the roster. However, it also suggested that the employer should, in fairness, pay him anyway.
The circumstances behind the case
Laurent Friederich v LCDF Trading Pty Ltd t/as La Casa del Formaggio  FWC 2963 involved an unfair dismissal claim that was brought by a machine operator against a South Australian cheese manufacturer.
The worker had been a casual employee since 2009 (although he had a stint away from the employer between 2012 and 2015). From then on, he worked a regular 37.5-hour week that involved five overnight shifts starting on Sunday evening and finishing on Friday morning.
When the worker began, almost all employees were casuals. However, in 2020, the employer set about converting most staff to permanents. The worker was offered the opportunity to become permanent, but turned it down because he would lose his 25% casual loading, as well any flexibility about taking leave.
In 2022, the employer decided to relocate from Glynde in inner Adelaide to Edinburgh in Adelaide’s far north – a journey of over half an hour. The new factory didn’t require as many staff to work shifts, and the employer made around 10 workers redundant. The employer did not roster the worker at the new plant. When work at the Glynde factory dried up, they told him there was no longer any steady work available and took him off the roster, which wouldn’t be updated for six weeks.
Believing he was entitled to long service leave, the worker resigned. However, because he was a casual, he was not offered any form of compensation in the form of redundancy or termination pay.
Was the worker unfairly dismissed?
The worker brought an unfair dismissal claim in the Fair Work Commission. He argued that he had a reasonable expectation of ongoing employment on the same basis he always had. He also submitted that he was forced to resign because he would otherwise face at least six weeks without work.
The worker submitted that he had effectively been made redundant, but the employer had failed to consult him or apply the provisions of his Award.
Meanwhile, the employer argued that it had still not determined the extent of shifts required at the new site and that, as a casual, the worker had no entitlement to ongoing work. Nor was he entitled to redundancy or termination pay.
What the Commission found
The Commission noted that the inherent nature of casual employment was that working hours could not be guaranteed. It also observed that, while the worker had been given long-term hours that mimicked full-time employment, he was still casual. In fact, he had made a rational decision to forego the security of full-time employment to access the higher income available from casual loading.
This meant the employer had no legal obligation to guarantee his hours, so it had not repudiated the employment contract by leaving him off the roster.
The Commission said that, while this action may have had a profound effect on the worker’s earnings, it was not illegal.
That said, the Commission noted that the employer’s treatment of the worker was ‘opportunistic’, ‘thoughtless’ and ‘disrespectful’, especially given his length of service. While it concluded that it had no jurisdiction to hear the claim, it encouraged the employer to make an ex-gratia payment to the worker and to make it the equivalent of what he would have received if he were permanently employed and made redundant.
“This, I consider, would conclude this litigation and what had been a mutually beneficial relationship for eight years on a respectful and respectable basis,” the Commission said.
What the case means for employers
The case is relevant for so many employers working in sectors that rely on casual staff, from hospitality to manufacturing and from mining to retail.
It highlights that the Commission is prepared to take the stated relationship into account rather than weighing up factors such as length of service and working hours. In doing so, it will rule in favour of a casual rather than permanent employment relationship, even where an employee has prolonged and regular work patterns.
But it also shows that there can be a juxtaposition between the law and what’s considered ‘reasonable’ or ‘right’. On this occasion, it essentially found that, even though the employer was technically correct, it hadn’t really “done the right thing”.
If you need clarity around your obligations when it comes to casual employees, get in touch.