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Court finds labour hire worker entitled to annual leave

in Employment Law by Slater and Gordon on
Court finds labour hire worker entitled to annual leave

Slater and Gordon’s industrial law team in Queensland recently won a significant case for labour hire employees engaged, in particular, in the mining industry.

Slater and Gordon represented Paul Skene, who with the support of the CFMEU Mining and Energy Division, took the labour hire company WorkPac to the Federal Circuit Court to recover annual leave, after having been treated by WorkPac as a casual employee.

WorkPac had argued that Mr Skene was a casual employee, and as such, was not entitled to annual leave. 

Although genuine casual employees are not entitled to accrue annual leave, and the Federal Circuit Court found that Mr Skene was a casual employee within the terms of the enterprise agreement that governed his employment with WorkPac, the Court also decided that properly characterised, Mr Skene was not in fact a casual employee and that he was entitled to accrue and be paid annual leave under the Fair Work Act.

Following the court’s initial decision, WorkPac argued that Mr Skene should be paid at the rate for casual employees under the enterprise agreement covering his employment, rather than the higher rate at which he had, in fact, been paid during his assignment at Rio Tinto’s Clermont Mine.

The Court’s initial decision was handed down in November 2016, and on 21 March 2017 the Federal Circuit Court issued final orders, requiring Mr Skene to be paid at the hourly rate that he was paid pursuant to the Notice of Offer of Casual Employment he received at the commencement of his assignment at Clermont Mine.

WorkPac filed an appeal against the decision in the Federal Court immediately after the Court handed it down on 21 March 2017.


The case in more detail

In April 2010 Paul Skene was employed by WorkPac Pty Ltd, a labour hire company.  He signed a contract of employment which provided that his employment with WorkPac was on an assignment-by-assignment basis, with each assignment representing a discrete period of employment on a casual or fixed term hourly basis.

After a short assignment at Anglo Coal’s Dawson Mine in central Queensland, Mr Skene sought an assignment as a dump truck operator advertised at Rio Tinto’s Clermont Mine. 

Mr Skene was subsequently provided with a Notice of Offer of Casual Employment relating to the Clermont Mine position.

Mr Skene commenced work at Clermont Mine in July 2010.  He attended an induction with Rio Tinto at the mine, and was informed that his hours of work would be 12.5 hours per shift on a “7 days on, 7 days off continuous roster arrangement”.

Mr Skene was assigned to C Crew, comprised of employees of both WorkPac and Rio Tinto.  Mr Skene was given a roster covering a period ending in December 2010.

Mr Skene received rosters from Rio Tinto for his crew 12 months in advance.

Mr Skene was flown in and out of Clermont Mine at the beginning and end of each 7-day period of work and stayed without cost to him, in camp-style accommodation located at the mine.

Mr Skene was paid weekly by WorkPac for the hours that he worked, according to a weekly timesheet that he was required by WorkPac to fill out.  His hourly rate of pay commenced at $50 per hour, rising to $55 per hour in April 2012.

During his employment with Workpac at Clermont mine, Mr Skene did not take any paid annual leave.  Upon the termination of his employment he was not paid anything in respect of untaken annual leave.

The Federal Circuit Court applied the common law test and found that Mr Skene was not a casual employee and that he was therefore entitled to accrue annual leave and be paid out his accrued annual leave upon termination. 

The Court relied on evidence that Mr Skene’s employment at Clermont Mine was:

  • regular and predictable;
  • continuous;
  • facilitated by the fly in, fly out arrangement and the provision of accommodation at no cost to himself;
  • the fly in, fly out arrangement was inconsistent with the notion that Mr Skene could elect to work on any day and not work for others without making the necessary arrangements;
  • there was an expectation that Mr Skene would be available on an ongoing basis to perform the duties required of him;
  • the work undertaken by Mr Skene was not subject to significant fluctuation from one day, or one week, or one month, or one year to the next,

To find that the essence of casual employment was missing, and by contrast that in Mr Skene’s case, “there is no absence of a firm advance commitment as to the duration of Mr Skene’s employment or the days (or hours) he would work.  Those matters were all clear and predictable.  They were set 12 months in advance.”

Skene v Workpac Pty Ltd [2016] FCCA 3035
Skene v Workpac Pty Ltd (No. 2) [2017] FCCA 525