[2013] FWCFB 2434

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Fair Work Act 2009
s.604—Appeal of decision

Telum Civil (Qld) Pty Limited
Construction, Forestry, Mining and Energy Union

Industries not otherwise assigned



Appeal - meaning of “casual employee” in the National Employment Standards.

[1] This is an application by Telum Civil (Qld) Pty Limited (Telum) for permission to appeal and, if permission is granted, an appeal against a decision of Commissioner Booth ([2012] FWA 10684) on an application pursuant to s.739 of the Fair Work Act 2009 (FW Act) for FWA to resolve a dispute raised under the dispute settlement procedure in the Telum Civil (QLD) Pty Limited ABN 98 134 691 482 Section 329 Union Greenfields Agreement Contract Labour Hire -Civil Works February 2009 (Agreement), an enterprise agreement made under the Workplace Relations Act 1996.

[2] Telum operates a construction business. It appears that at the time the Agreement was made Telum was respondent to the National Building and Construction Industry Award 2000, a pre-reform Federal award. From 1 July 2009 Telum was covered by the Building and Construction General On-site Award 2010 (Construction Modern Award) albeit that the Agreement prevailed over the Award.

[3] The dispute relates to a group of Telum’s employees who had worked on the ‘Origin Alliance Project’ whose employment had come to an end because the project was complete and the employees were no longer required. The CFMEU contended on behalf of the employees that they were entitled redundancy payments under the National Employment Standards (NES). The group of employees in question (the Employees) had been regarded by Telum as casual employees and paid a casual loading.

[4] Division 11 of the NES deals with notice of termination and redundancy pay. Section 123(1)(c) provides that Division 11 does not apply to a casual employee:

[5] Telum refused to make redundancy payments the basis that the Employees were casual employees.

[6] Conciliation of the dispute was unsuccessful and the Commissioner conducted an arbitration that the parties agreed would be determined by reference to the following “Questions for arbitration... determined at a Directions Hearing on 19 October 2012” ([2012] FWA 10684 at [9]):

[7] The Commissioner noted that “[t]he parties agreed that the matter could be decided on the papers with the need for a hearing.”

[8] Clause 2 of the Agreement relevantly provides:

[9] Clause 3.3 of the Agreement provides:

[10] Clause 3.4 obliged Telum to give “a permanent employee” notice of termination as prescribed in that clause and states:

[11] Clause 3.9 conferred a redundancy benefit on “each permanent employee”.

[12] It appears not to have been in dispute that Telum had recorded all of the Employees in its books as casual employees and had paid them a casual loading, recorded as such on their pay slips. It is more than tolerably clear from the Commissioner’s reasons for decision that the case had proceeded before the Commissioner on an assumption that the Employees had been expressly engaged as casuals at the time of their employment, had been paid as casuals throughout their employment and had otherwise been treated as casuals by Telum (see especially [2012] FWA 10684 at [54]).

[13] Indeed, the initiating application filed by the CFMEU proceeded on a premise that the Employees were casual employees. On its face, the initiating application contended that the Employees were entitled to redundancy payments in accordance with the NES because they were “long term casual employees”.

[14] The Commissioner correctly concluded that the entitlement or otherwise of the Employees to redundancy payments under s.119 of the NES turned on whether the Employees were “casual” or not within the meaning of s.123(1)(c). ([2012] FWA 10684 at para [14]).

[15] The CFMEU fundamentally altered its contentions during the course of the matter. The Commissioner noted that “[t]he CFMEU in its application submitted that the employees were long term casual employees as defined in the Act and therefore entitled to redundancy. In later submissions, it argued that the employees were not casual, regardless of the label used or the forms surrounding their employment”. The Commissioner continued:

[16] The Commissioner had noted the following submissions from the CFMEU that she accepted as uncontested ([2012] FWA 10684 at [17])

[17] The Commissioner considered a number of authorities on what constitutes casual employment under the general (common) law. The case advanced by the CFMEU, and accepted by the Commissioner, was that the expression “casual employee” in s.123(1)(c) should be given a meaning consistent with the general law.

[18] The Commissioner’s conclusions are captured in the following extract ([2012] FWA 10684 at para [50]ff):


[19] The case before the Commissioner turned on the meaning of the expression “casual employee” in s.123(1)(c) on its proper construction.

[20] The Commissioner did not expressly address the proper construction of s.123(1)(c) but, rather, proceeded on an assumption the expression “casual employee” in s.123(1)(c) referred to the notion of casual employment under the general (common) law. For the reasons that follow, that assumption was affected by error.

[21] We do not propose to set out a detailed summary of the state of the general law on what constitutes casual employment. A useful conspectus of the authorities was provided by Boland P in Public Service Association and Professional Officers’ Association Amalgamated Union of New South Wales v Department of Justice and Attorney General (Corrective Services NSW) [2010] NSWIRComm 148. It is sufficient to note for present purposes that the notion of casual employment remains “ill-defined” under the general law and calls for the application of criteria that do not deliver a clear and unambiguous answer in many cases but, rather, lead to results on which reasonable minds may differ.

[22] The language of s.123(1)(c), like any other provision, must be construed in the context of the FW Act as a whole and with the purposive approach mandated by s.15AA of the Acts Interpretation Act 2001. There is no rule of construction that dictates that an expression such as “casual employee” must have its general law meaning.

[23] The FW Act did not commence in a vacuum. It replaced the WR Act and inherited a Federal award system and an award modernisation process that was undertaken in anticipation of the central place of modern awards in the FW Act system.

[24] There is a long history of regulation of casual employment in Federal awards - including grappling with the issues arising from the nature of casual employment, the increasing casualisation of the workforce and problems associated with employees who are labelled and paid as casuals notwithstanding that they have a regular and ongoing pattern of engagement indistinguishable from ‘permanent’ full time or part-time employees. That history is set out at length in the decision of the Full Bench of the AIRC in Re Metal, Engineering and Associated Industries Award 1998 (2000) 110 IR 247 (Munro J, Polities SDP and Lawson C; 29 December 2000) (Metals Casuals Case) and we will not repeat it here. That careful decision is of particular importance and repays close study. The Metal, Engineering and Associated Industries Award 1998 (pre-reform Metals Award) was the centrepiece of the Federal award system in the decades prior to the award modernisation process. The Full Bench was dealing with an application by the AMWU to vary the provisions relating to casual employment in pre-reform Metals Award to restrict casual employment under the pre-reform Metals Award to what have been described as “true” casuals (employees who work under arrangements characterised by ‘informality, uncertainty and irregularity’ - (2000) 110 IR 247 at para [109]) and to increase the casual loading.

[25] The Metals Casuals Case demonstrates how and why the specification of casual employment in Federal awards had diverged from the (ill-defined) general law position to a position where, by the time of award modernisation process, for many, if not most, Federal awards, an employee was a casual employee if they were engaged as a casual (that is, identified as casual at the time of engagement, perhaps with a requirement of a writing) and paid a casual loading. The Full Bench recognised that this approach had led to a position where employees with regular and systematic hours on an ongoing basis could still be “casual employees” under a Federal award.

[26] The objects of the FW Act are specified in s.3. Of particular relevance are the following:

[27] Chapter 2 of the FW Act deals with terms and conditions of employment of national system employees. Section 41 notes:

[28] Section 59 of the FW Act provides a guide to the National Employment Standards in Part 2-2 and underscores the interrelationship between the NES and modern awards and enterprise agreements:

[29] Section 282 notes that Part 2-2

[30] Section 282 also notes that Div 4 of Part 2-2 “provides for national minimum wage orders and requires employers to comply with them” and that such orders “also set the casual loading for award/agreement free employees”. (See s.282(2) and (4), s.295(1)(b) and (2)(c) and s.295(1)(b)).

[31] It may be noted that the FW Act draws a distinction between the coverage of a modern award and the application of that modern award (as did Part 10A of the WR Act). Section 57 of the FW Act provides that a modern award does not apply to an employee (or to an employer, or an employee organisation, in relation to the employee) in relation to particular employment at a time when an enterprise agreement applies to the employee in relation to that employment. Transitional provisions achieved the same effect in relation to certified agreements and, later, workplace agreements made under the WR Act that continued in operation after the commencement of the FW Act - see Part 2 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) and s.170LY and, after the WorkChoices amendments, s.349 of the WR Act).

[32] If a modern award covers an employer and its employees, that modern award becomes the primary reference instrument against which an enterprise agreement is assessed for the purposes of the better off overall test in s.193. A proper application of that test should ensure that ‘casual’ employees under an enterprise agreement are better off overall when compared to their entitlements under the applicable modern award.

[33] Part 10A of the Workplace Relations Act 1996 (WR Act) made provision for an award modernisation process and the making of modern awards by the Australian Industrial Relations Commission (AIRC). Section 576J specified the matters about which terms could be included in a modern award. Section 576J(1)(b) of the WR Act authorised the inclusion of terms about:

[34] The FW Act, in Part 2-3, makes continuing provision for that system of modern awards and contains an authorisation in identical terms: s.139(1)(b) of the FW Act.

[35] As a result of the award modernisation process, the Full Bench of the AIRC made some 122 modern awards covering most of the economy that commenced to operate on 1 January 2010, including the Construction Modern Award. Roughly speaking, the areas of employment that remain award-free are only those areas that, historically, have been award-free.

[36] Section 59 and s.139(1)(b) of the FW Act demonstrate that the legislature contemplated that casual employment, as a type of employment, might be defined in modern awards as, indeed, it has been.

[37] The FWC has responsibility for maintaining the modern award system in accordance with the modern awards objective in s.134 which specifies that “[t]he FWC must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account” a list of matters: see, generally, Part 2-3 of the FW Act.

[38] All of the modern awards contain a definition of casual employment. Those definitions, notwithstanding some variation in wording, have the same core criteria:

[39] For example, clause 14.1 of the Manufacturing and Associated Industries and Occupations Award 2010 provides:

[40] That award excludes casual employees from the entitlement to annual leave, personal leave and the other entitlements for which the casual loading compensates.

[41] Clause 14 of the Construction Modern Award relevantly provides:

[42] Again, this approach to the identification of casual employees was not an innovation in the modern awards. Many, if not most, of the pre-reform awards, and certainly the main pre-reform awards, adopted this approach.

[43] None of the modern awards adopt the general law approach to the identification of casual employees. Indeed, a number of modern awards contain ‘casual conversion’ provisions (typically where casual conversion was a feature of the key Federal awards and or NAPSAs replaced by the modern award) that allow for an employee who is engaged and paid as a casual, but who works systematic and regular hours for a sufficient period, to seek conversion to permanent full time or part time employment. For example, the Construction Modern Award contains such a provision, clause 14.8, which includes the following:

[44] Such ‘casual conversion’ provisions were not uncommon in pre-reform Federal award and presuppose that the general law approach to identifying casuals does not apply in the Federal award context and that a provision such as this is required if an employee who is engaged and paid as a casual is to be treated as anything other than a casual for the purposes of a modern award.

[45] The general approach to casual employment in the modern awards is a continuation of the approach explained and adopted in the Metals Casuals Case and underscored in Redundancy Case 2004 (PR032004).

[46] It will be noted that a range of NES entitlements do not apply to a “casual employee”:

[47] These are all entitlements of permanent employees that are compensated for in the casual loading: compare Metals Casuals Case (2000) 110 IR 247 at [160]ff and Re Pastoral Industry Award 1998 (2003) 123 IR 184 at [76]ff and esp at [109]-[111].

[48] To adopt the construction of s.123(1)(c) adopted by the Commissioner would allow for double dipping by employees engaged as casuals and paid the casual loading, but who work regular and systematic hours, of the sort that the Full Bench in the Redundancy Case 2004 set its face against (PR032004 at [154]). It is unlikely that the legislature intended that outcome. It is an outcome that is inconsistent with the purpose and objects of the FW Act. It is an outcome that would tend to impede productivity and flexibility (cf s.3(a) and (f)) for the reasons explained by the Full Bench in the Metals Casuals Case.

[49] Other uses of the expression “casual employee” or the word “casual” in the FW Act support the conclusion that they refer to the characterisation of the employee under the applicable modern award or enterprise agreement.

[50] The FW Act defines the expression “long term casual employee’ in s.12 to mean

[51] This very definition suggests that legislature did not intend the expression “casual employee” to call up the general law approach. If the criterion in (b) is satisfied then the employee would likely not be a “casual employee” under the general law approach but the definition presupposes that an employee who satisfies the criterion in (b) can still be a “casual employee” within the meaning of (a).

[52] Moreover, that definition is used in only two places in the FW Act:

[53] In each case, the definition is used to extend those rights to long term casual employees, being rights to which casual employees are otherwise expressly excluded.

[54] Section 23 specifies the meaning of the expression “small business employer” and relevantly provides:

[55] Again, the language presupposes that an employee can still be a casual employee even though he or she is employed on a regular and systematic basis.

[56] The FW Act makes special provision in relation casual employees accessing the unfair dismissal remedy. Relevantly for present purposes, an employee is not protected from unfair dismissal by the FW Act unless her or she has “has completed a period of employment with his or her employer of at least the minimum employment period” (s.382(a)). The minimum employment period is 6 months or 12 months depending upon whether the employer is a “small business employer” (s.383). The expression “period of employment” is defined in s.384 which relevantly provides:

[57] Again, the language of s.383(2)(a) presupposes that an employee employed on a regular and systematic basis with a reasonable expectation of continuing employment on a regular and systematic basis can still be a “casual employee”. A conclusion at odds with the general law approach adopted by the Commissioner.

[58] In summary, the FW Act provides for the regulation of terms and conditions of employment of national system employees through an interrelated system of the National Employment Standards, modern awards, enterprise agreements (and, in some cases, workplace determinations or minimum wage orders). Having regard to the objects and purpose of the legislation, it is obvious that the legislature intended that those components should interact consistently and harmoniously. We conclude that on the proper construction of the FW Act the reference to “casual employee” in s.123(3)(c) and the rest of the NES - and, indeed, elsewhere in the FW Act - is a reference to an employee who is a casual employee for the purposes of the Federal industrial instrument that applies to the employee, according to the hierarchy laid down in the FW Act (and, if applicable, the Transitional Act). That is, the legislature intended that a “casual employee” for the purposes of the NES would be consistent with the categorisation of an employee as a “casual employee” under an enterprise agreement made under Part 2-4 of the FW Act (or under an “agreement based transitional instrument” such as a workplace agreement or certified agreement made under the WR Act) that applies to the employee or, if no such agreement applies, then consistent with the categorisation of an employee as a “casual employee” within the modern award that applies to the employee. Subject to any terms to the contrary, a reference to a “causal employee” in an enterprise agreement (or agreement based transitional instrument) will have a meaning consistent with the meaning in the underpinning modern award (or pre-reform award/NAPSA).

[59] The CFMEU placed particular reliance on the decision of Barker J in Williams v MacMahon Mining Services Pty Ltd (2010) 201 IR 123. That case was relevantly concerned with the meaning of “casual employee” in s.227 of the Workplace Relations Act 1996. Barker J noted (at [31]) that “[t]he parties accept that the WR Act does not define the expression “casual employee” and so the expression should be given its ordinary common law meaning.” This case is concerned with a different statutory context and Barker J’s decision does not assist in the proper construction of the expression “casual employee” in s.123(1)(c) of the FW Act.

[60] In the present case, the Employees were engaged as casuals under the Agreement. The Agreement was a workplace agreement made under the WR Act and continued to operate after 1 July 2009 as an “agreement based transitional instrument”. It was underpinned by the pre-reform National Building and Construction Industry Award 2000. Clause 13 of that pre-reform award relevantly provided:

[61] Clause 3.3 of the Agreement creates two categories of employee: “permanent employees” and “casual employees”. Those expressions are not defined. However, under the Agreement only “permanent employees” are entitled to paid annual leave, personal leave, public holidays and to notice of termination and redundancy payments. The reference to “casual employee” should be construed in the context of the underpinning award as having a meaning consistent with clause 13.4.1 - that is, an employee engaged and paid as a casual under the Agreement. [The Agreement operated to the exclusion of that underpinning pre-reform award (clause 2). There is no scope for the operation of sub-clauses 13.4.3 and 13.4.4. The Agreement was not obliged to replicate those provisions. The Agreement was certified and thus had passed the ‘no disadvantage test’ in s.346D of the WR Act notwithstanding the non-replication of those casual conversion provisions.]

[62] The case proceeded before the Commissioner on the assumption that the Employees were engaged and paid as casual under the Agreement. It follows that, under the Agreement, the Employees were “casual employees” and were thus “casual employees” for the purposes of s.123(1)(c).

[63] We are satisfied that the Commissioner’s decision is affected by error and that we should grant permission to appeal and do so. The appeal proceeds as a rehearing. On the rehearing, for the reasons we have given, we are satisfied that the Employees were “casual employees” within the meaning of s.123(1)(c) excluded them from the notice and redundancy entitlements in Division 11 of the NES.

[64] The appeal is allowed. The decision and “order” of the Commissioner are quashed. The initiating application of the CFMEU is dismissed.



Mr B Cross of Counsel with Mr N Noonan for the Appellant

Mr T O’Brien for the Respondent

Hearing details:



27 February

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