The casual conundrum hidden under the Christmas tree

By Luis Izzo – Managing Director, Sydney Workplace, Australian Business Lawyers & Advisors

On 31 December 2018, many Australians were still finishing off their Christmas leftovers or otherwise gearing up for a night of festivities. The same cannot be said for the Fair Work Commission.

Instead, a Full Bench of the Commission handed down a decision that will have a nation-wide impact on the voting rights of casual employees with respect to enterprise bargaining.

The relevant statutory provisions
The Fair Work Act provides that an employer may request all employees “employed at the time” to approve of an enterprise agreement if they will be covered by the agreement.

Whilst, ordinarily, there is no difficulty in ascertaining which employees are “employed at the time”, the application of this provision with respect to casual employees has been particularly fraught.

The casual conundrum
In McDermott Australia Pty Ltd [2016] FWC 1113, Commissioner Lee rejected the approval of an enterprise agreement in circumstances where casual employees who had been employed to work on a specific offshore project - but who were not working on the voting days - voted on the agreement. Commissioner Lee found that, because the casuals were not working on any of the days the agreement was voted on, they could not be said to be “employed at the time” of the vote.

This decision was overturned on appeal. A Full Bench of the Fair Work Commission held that:

The Commissioner was of the view that there was something wrong with the vote occurring while employees were not actually performing or being paid for performing work at the time of the vote. This in our view is incorrect; the status of the 36 casual employees at the time of the vote is a natural and expected phenomenon of being employed on a casual contract… In our view it would be inappropriate or counter intuitive to disenfranchise casual employees of a right to vote on an agreement that determines their wages and conditions on the basis that they were not rostered on to work on the day/s of the vote…” ([2016] FWCFB 2222)

CFMMEU v Noorton Pty Ltd t/a Manly Fast Ferry (Noorton)
On 31 December 2018, a differently constituted Full Bench of the Fair Work Commission handed down the decision in Noorton and effectively dismissed the 2016 approach taken in the McDermott appeal.

The Full Bench found that the orthodox position is that casual employees commence each engagement under “a separate contract rather than a continuing contract of employment.” That is, a casual’s employment commences and finishes on each particular day of work.

The Full Bench further held that, even where a casual employee is engaged on a regular and systematic basis, this does not change the fact that the casual employee’s engagement ceases at the conclusion of each day’s work and, importantly, does not mean that the employee is “employed at the time” of the vote if the employee is not working on any of the voting days/during the access period.

The Full Bench found that specific evidence would need to be adduced of a unique arrangement in order for casual employees to be granted voting rights where they are not working on any of the voting days or during the access period for the EA. The type of evidence contemplated as being necessary by the Full Bench was evidence of “a firm advance commitment from Noorton to continuing and indefinite work according to an agreed pattern of work which was given to any particular casual employee” (this might well be evidence that the casual employee is not genuinely a casual).

Given that all employees in Noorton were casuals, many did not work on the voting days and given the lack of any evidence about their specific engagements, the Commission overturned the decision to approve the enterprise agreement.

What do employers do now?

The state of the law in this space is rapidly evolving. At present, to minimise prospects of an EA vote being invalidated at a later date, employers should ensure that only the following employees are entitled to vote:

1. Permanent employees
2. Casuals who actually work on one of the voting days or who worked during the access period for voting (this latter/broader group has not yet been endorsed by the Courts)
3. Casuals where evidence establishes there is a firm advance commitment to continuing and indefinite work according to an agreed work pattern (this category of casuals could well be considered permanent under recent Federal Court authorities).

If an employer wishes to ensure that its casual workforce vote counts, thought should be given to rostering employees to present for work on the day of the vote (or a voting day where multiple voting days are scheduled). This is the only approach which provides absolute certainty that an EA will not be invalidated at a later date. Advice should also be sought regarding how this approach interacts with postal/email votes or industrial instrument minimum engagement periods.

Our expert team at ABLA are advising employers on a daily basis regarding enterprise bargaining and would be more than happy to assist with any queries in relation to these latest developments.