HR Toolbox Edition 16 – 2018

by | Oct 4, 2018 | Employment Law and Workplace Relations Blog

Employment law and HR news for employers and HR professionals

Latest news

  • Senate Inquiry into Gig Economy

The Future of Work Report (the Report) has been released by the Select Committee on the Future of Work and Workers (established by the Senate) after a year-long inquiry to “report on the impact of technological and other change on the future of work and workers in Australia”…including relevantly “employment status and working patterns of Australians”.

The Report considers the rapidly evolving employment landscape including the rise of the “gig economy” and rejects the argument that gig workers are deemed independent contractors. The Report proposes a separate category referred to as “non-standard work” which typically refers to work that is “precarious” or “insecure”.

The test to determine whether a worker is an independent contractor, or an employee according to the Report is: “if a company makes money directly as a result of workers’ labour, and if workers are dependent on the company for work and income, then those workers are employees of that company”.

The Report gives us an indication as to what legislative changes can be expected in the future including re-defining the definition of “casual employee” to cover workers in the gig economy and/or non-standard work. To read the full Report, click here.

  • Casual conversion clauses

The Fair Work Commission has approved the incorporation of a casual conversion clause into 84 modern awards from 1 October 2018.

This conversion clause allows casual workers to request that their employment be made permanent subject to (i) the employee having been in the position for at least 6 months or 12 months (depending on each award); and (ii) the employee has been in the casual position for an ongoing and regular basis.

The employer may refuse the request to convert from casual employment to fulltime/part time employment, however the grounds for refusal must be reasonable and after consultation with the employee. For further information on what may constitute reasonable grounds, please refer to paragraph 2 of the “Model Casual Conversion Clause” in the link below.

We suggest that employers review any applicable modern award/s to determine their obligations, including providing existing casual employees with a copy of the conversion clause by 1 January 2019. To read the full decision, click here.

Latest decisions

  • Casual workers may be entitled to annual leave entitlements

In an unprecedented decision, on appeal, the Full Federal Court of Australia has found in WorkPac Pty Ltd v Skene [2018] FCAFC 131 that a casual truck driver engaged under an enterprise agreement (EA) was entitled to annual leave under the National Employment Standards (NES).

The labour hire company, WorkPac argued that Mr Skene had no entitlements to annual leave under the EA and that Mr Skene was casual simply because he was designated as such under the EA. This contention was rejected by the Full Court which confirmed that the NES takes primacy over any employment contract or industrial instrument and that “casual” should be interpreted using its ordinary legal definition.   The Full Court held that although the term “casual” lacks “precise definition”, the indicia laid down by the law including irregular work patterns, uncertainty, discontinuity, intermittency of work and unpredictability cannot be ignored when assessing the factual circumstances in the process of characterising whether a worker is permanent or casual.

Relevantly, the Full Court confirmed the principles enunciated in Hamzy v Tricon International Restaurants trading as KFC (2001) 115 FCR 78 and confirmed that the essence of casual employment “is the absence of a firm advance commitment as to the duration of the employees’ employment or the days (or hours) the employee will work…”

Although the Full Court held that no single criterion is likely to be decisive, one must have regard to a number of factors and relevantly “the conduct of the parties to the employment relationship and the real substance…and true nature of that relationship”.

The Full Court held that the “essence of casual employment” as adopted from Hamzy was not established in this case because Mr Skene’s work patterns were regular and sufficiently predictable and there was a clear expectation that he would be available on an ongoing basis as the roster was set 12 months in advance. The Full Court ultimately held that Mr Skene was permanent pursuant to the NES and the EA and was entitled to payment of annual leave entitlements upon the termination of the employment.

Mr Skene’s appeal to the Full Bench was upheld with respect to compensation payable for WorkPac’s failure to pay annual leave entitlements and any pecuniary penalties imposed on WorkPac for failing to meet its obligations. This matter has been remitted to the Federal Circuit Court for determination. To read the full decision, click here.

  • Litigation against the Gig-Economy heats up

Recent claims have emerged against Foodora Australia Pty Ltd (Foodora) including a potential unfair dismissal claim and sham contracting.  The sham contracting case involving 3 bicycle delivery drivers was initiated by the Fair Work Ombudsman in or around 12 June 2018.

Concurrent with the above case, a former Foodora courier, Mr Klooger has sought to convince Fair Work Commissioner Saunders that he was in fact an employee despite the purported independent contractor agreement in place for the purposes of pursuing an unfair dismissal claim (under the Fair Work Act 2009 (Cth)), alleging $47,000 in wages and entitlements.

Foodora (which subsequently appointed voluntary administrators in August 2018) formerly operated an on demand digital food delivery application, synonymous with the features of a gig economy employer and in contrast to the typical traditional binary working relationship.

Relevantly, some factors considered by the Fair Work Ombudsman and Mr Klooger’s counsel when applying the “standard multi-factorial test” were (i) Foodora’s significant control over the workers’ activities; (ii) the fact that the workers were required to wear Foodora branded clothing; and (iii) the workers were exclusively working for Foodora rather than publicly advertising their own personal delivery service.

The Fair Work Ombudsman has prematurely discontinued the sham contracting proceedings against Foodora following its administration, and the unfair dismissal claim was vacated on 3 September 2018.

It is unclear at this stage whether the alleged unfair dismissal case initiated by Mr Klooger will continue upon the finalisation of Foodora’s affairs.  To read the full update on the Fair Work Ombudsman’s action against Foodora, click here.

Natalie Knight

Natalie Knight