Ruling puts casual employee redundancy pay into play


FWC states that employees can accrue entitlements from initial casual employment

Ruling puts casual employee redundancy pay into play
The full bench was divided in its decision.

 

A recent decision by the Fair Work Commission (FWC) in Australian Manufacturing Workers' Union (AMWU) v Donau Pty Ltd case has held that initial regular and systematic casual employment by a person before being hired as a permanent employee must be included when calculating their redundancy entitlements.

Overturning the decision by Commissioner Bernie Riordan, the full bench found that a period of service by a regular and systematic casual employee is not identified as one of the exclusions from a period of service or continuous service in the Fair Work Act 2009.

The case emerges as the FWC is considering whether to extend Modern Award casual and part-time provisions to the long distance and distribution transport Awards.

The case revolves around the interpretation of the definition of "service" and "continuous service" in section 22 of the Act.

The full bench ruled that there were no words in the relevant enterprise agreement or the Act that exclude a period of regular and systematic casual employment from the definition of service or continuous service for the purpose of calculating severance payment.

The judges found that Section 123 of the Act precludes a casual employee from accruing entitlements to redundancy pay.

The Act also states that casual employees are not entitled to notice of termination unless specified in their contract agreement.

"A period of continuous service as defined by s.22 of the Act includes a period of regular and systematic casual employment," the bench ruled.

"There are no words in the Agreement or the Act excluding any period of regular and systematic casual employment from the calculation of service for the purposes of a redundancy payment."

However, the bench conceded that industrial justice might suggest that "it is unfair for an employee who has received a casual loading for a period of employment to have that period of employment also count towards the accrual of severance payments.

"However, the Act does not exclude a period of regular and systematic casual employment from the definition of service or continuous service for the purpose of severance payments, and neither does the agreement exclude that period of employment."

It was not a unanimous decision, with Commissioner Ian Cambridge disagreeing with senior deputy president Drake and deputy president Lawrence in their decision, holding that service is intrinsically not derived from casual employment unless specified otherwise.

Cambridge concurred with Riordan’s statement that "the prior casual service of permanent employees does not count towards the calculation of the period of service for purposes of notice and redundancy pay".

The Commission has called for submissions on the issue of whether casual service is counted for the purposes of redundancy and notice of termination once a person has been appointed as a permanent employee.

Interested parties can make their submission by close of business on September 2.

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