A majority of a Full Bench of the Fair Work Commission has recently held that for the purposes of calculating notice of termination and redundancy entitlements for permanent employees under the Fair Work Act 2009 (Cth) (the Act), a prior contiguous period of regular and systematic service as a casual employee will count as service.

The Full Bench said that to be included in the calculation of continuous service there can be no break between the period of regular and systematic casual employment and the transition to permanent employment.  It must be part of the period of employment from which an employee is being terminated or made redundant.

The Full Bench found support for its position in the fact that a period of service by a regular and systematic casual employee is not listed as one of the exclusions from a period of service under subsection 22(1) or continuous service under subsection 22(4) of the Act.  It took this position despite the fact that the relevant casual employees had received a loading of 25% on the permanent employee rate of pay at the time they had been casuals to compensate them for the lack of access to permanent employee entitlements.

In a dissenting judgment, Commissioner Cambridge highlighted the consequences of the decision of the majority on other service related entitlements under the Act, such as annual leave and personal leave, which are not available to casual employees but could now arguably be retrospectively conferred on a permanent employee.  This is particularly so given that there is unlikely to be scope in the Act for service in relation to notice and redundancy to be treated differently to service in relation to those other entitlements.

Employers should be aware of this decision and monitor any future developments in this area.

A full copy of the decision is available at AMWU v Donau Pty Ltd [2016] FWCFB 3075 (15 August 2016).

 

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