Fair Work: What is the law around “continuous service”?

In a recent case, the Fair Work Commission considered whether an employee, who resigned from full-time employment and then became a casual worker for the same employer, broke her period of “continuous service”, required for her unfair dismissal claim. It ultimately found in the employee’s favour, that she remained in a continuous employment relationship despite her change of status.

Background

Elizabeth Rankine was employed as a residential night worker at the Aboriginal Sobriety Group Indigenous Corporation (“ASGIC”) – a not-for-profit organisation providing rehabilitation services to indigenous communities. She commenced employment as a casual worker in February 2018 but later became a full-time employee with the same company.

In July 2020, the ASGIC denied Rankine’s request to shift her work roster, to allow her to work on Sundays instead of Fridays. Frustrated by this, Rankine notified the company’s HR manager of her resignation. However, the ASGIC did not accept Rankine’s resignation, deeming it “an emotional decision”. Instead, the two parties agreed for Rankine to move to a casual roster, where she could more easily accept or reject shift offers.

Five days after her initial resignation, Rankine commenced her first casual shift. She worked as a casual employee over the following three months before recommencing full-time employment in December 2020. Approximately two months later, Rankine was dismissed. The ASGIC challenged Rankine’s eligibility to bring an unfair dismissal claim, asserting that, given her resignation, she had not met the six-month employment period required by the Fair Work Act.

Judgment

The Commission rejected the ASGIC’s argument that Rankine had not met the six-month employment period required to be protected from unfair dismissal. It found that “continuous service” should be understood as requiring an unbroken employment relationship and not necessarily an unbroken employment contract.

The Commission found that, on the day of her resignation as a full-time employee, Rankine agreed to become a casual employee immediately, therefore remaining in an employment relationship. It held that the fact that the ASGIC did not pay Rankine her leave entitlements immediately established a strong inference that it considered the employment relationship to be continuous.

With this, the Commission found that Rankine’s service was not broken by her resignation, nor the five-day gap between ceasing full-time employment and commencing her first casual shift. As such, it held that Rankine had served the minimum employment period required by s 382(2)(a) and was, therefore, eligible to bring an unfair dismissal claim.

Key Takeaways

• Where an employer accepts an employee’s resignation, they should ensure they do not act as though the employment relationship will continue
• After a resignation, employers should ensure the employee’s leave entitlements and accrued wages are paid promptly
• Where an employee’s employment status changes, it cannot usually be said that they have broken their period of “continuous service”