Unfair dismissal and casual employees Part 2

Yesterday I published a decision of the Fair Work Commission dealing with the legal issues involved when determining whether a casual employee was protected from unfair dismissal having been employed for at least the minimum employment period. Here is another.

“Consideration

[44] This decision concerns whether Mr Kumnick is eligible to make an unfair dismissal claim. It does not concern whether Mr Kumnick was unfairly treated.

[45] In order to be protected from unfair dismissal, the FW Act requires a minimum employment period of six months by an employee working in other than a small business. 13

[46] It is not in dispute that Mr Kumnick commenced working for Fedex’s predecessor in April 2017 and remained an employee until dismissed on 21 April 2022.

[47] Mr Kumnick was thus an employee ‘on the books’ and performing work for a period in excess of five years.

[48] The entirety of this period was as a casual employee. Mr Kumnick was a casual employee within the meaning of s 15A of the FW Act.

[49] Section 384 of the FW Act provides:

“384 Period of employment

(1) An employee’s period of employment with an employer at a particular time is the period of continuous service the employee has completed with the employer at that time as an employee.

(2) However:

(a) a period of service as a casual employee does not count towards the employee’s period of employment unless:

(i) the employment as a casual employee was as a regular casual employee; and

(ii) during the period of service as a casual employee, the employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis; and

(b) if:

(i) the employee is a transferring employee in relation to a transfer of business from an old employer to a new employer; and

(ii) the old employer and the new employer are not associated entities when the employee becomes employed by the new employer; and

(iii) the new employer informed the employee in writing before the new employment started that a period of service with the old employer would not be recognised;

the period of service with the old employer does not count towards the employee’s period of employment with the new employer.”

[50] A “regular casual employee” is defined in s 12 as:

“a national system employee of a national system employer is a regular casual employee at a particular time if, at that time:

(a) the employee is a casual employee; and

(b) the employee has been employed by the employer on a regular and systematic basis.”

[51] Whilst the phrase “continuous service’ is not defined in the FW Act, the ordinary meaning of “continuous service” is a period of unbroken service by an employee with an employer. 14 However, regularly and systematically rostered casual employees remain in service notwithstanding that each engagement may be by separate casual contracts. Gaps in time between such contracts do not necessarily break service because it is the employment relationship and not the contract that is assessed for continuity.15

[52] For these reasons, the phrases “period of employment” and “continuous service” in s 384 of the FW Act and the phrase “continuous service” in s 22 are best read as relating to a period of an unbroken employment relationship and not necessarily an unbroken employment contract (subject of course to the further statutory provisions in s 22 which deem certain service to be continuous despite a break in the employment relationship).

[53] Thus, to be eligible to make an unfair dismissal application, Mr Kumnick’s service as a casual employee in the six months prior to dismissal only counts if his casual employment was “on a regular and systematic basis” and “with a reasonable expectation of continuing employment by the employer on a regular and systematic basis”.

[54] For a casual employee to have worked “regularly and systematically” within the meaning of s 384(2) of the FW Act it is sufficient for their employment to have been “regular” in the sense of being frequent notwithstanding it being unpredictable, and “systematic” in the sense of it being part of a pattern of engagement occurring as a consequence of businesses reliance on the employee’s services notwithstanding that the precise pattern of working may not be foreseeable to the employee. 16

[55] The evidence as to incidence of work by Mr Kumnick in the six months prior to dismissal (21 October 2021 to 21 April 2022) is as follows: 17

  • 22 October 2021 (single Friday shift)
  • 29 October 2021 (single Friday shift)
  • 5 November 2021 (single Friday shift)
  • 12 November 2021 (single Friday shift)
  • 25 November 2021 (single Thursday shift)
  • 26 November 2021 (single Friday shift)
  • 3 December 2021 (single Friday shift)
  • 10 December 2021 (single Friday shift)
  • 17 December 2021 (single Friday shift)
  • 24 December 2021 to 1 February 2022 (no work; Christmas/New Year closedown)
  • 4 February 2022 (single Friday shift)
  • 8 February 2022 (single Tuesday shift)
  • 11 February 2022 (single Friday shift)
  • 25 February 2022 (single Friday shift)
  • 1 March 2022 (single Tuesday shift)
  • 4 March 2022 to 21 April 2022 (not rostered due to failure to accept revised terms)

[56] The shifts were usually four to five hours in length, though occasionally longer.

[57] All shifts commenced at approximately 3.30pm.

[58] As noted, whether a person’s employment is “regular” within the meaning of s 384 bears a relationship to frequency moreso than predictability. The concept should be applied liberally and implies a regular pattern. 18

[59] Mr Kumnick worked in each week of this period (other than the Christmas/New Year close down) except for two weeks (week of 15 November 2021 and week of 14 February 2022) until he was not rostered.

[60] Mr Kumnick’s work was commonly on a Friday of those weeks he worked. In this period, he worked each Friday except two (19 November 2021 and 17 February 2022). He worked on two additional weekdays in this period (a single Thursday and two Tuesdays).

[61] Given this pattern of frequency, I find that Mr Kumnick’s work as a casual was regular.

[62] Was Mr Kumnick’s employment systematic?

[63] Mr Kumnick was routinely allocated a weekly roster which reflected his availability. He was notified of his rostered shift(s) in advance. He was not simply called up at short notice and asked to fill a gap in operational requirements. Other than in the final seven weeks of employment when he was not rostered due to not agreeing to the revised casual contract, the extent to which FedEx relied on Mr Kumnick was material given that he was regularly rostered in advance.

[64] There was an established and identifiable system by which Mr Kumnick was offered casual work.

[65] Considered overall, I conclude that Mr Kumnick’s employment as a casual in the six months prior to dismissal was regular and systematic within the meaning of the FW Act.

[66] Did Mr Kumnick have a reasonable expectation of continuing employment on a regular and systematic basis?

[67] I adopt the approach set out by Deputy President Beaumont in Liting Gu v Geraldton Fishermen’s Co-operative Pty Ltd: 19

“[41] In my view, the consideration of ‘reasonable expectation’ is twofold. It requires, as was identified in Bronze Hospitality No.2, an examination of whether: (a) the employee had an expectation of continuing employment by the employer on a regular and systematic basis (subjective); and (b) that expectation, if held, was ‘reasonable’ (objective).

[42] In determining whether the expectation was ‘reasonable’, regard is had to the employment contract as established at the time employment commenced. However, in my view consideration extends to all circumstances throughout duration of employment, as they prove relevant. As observed in Bronze Hospitality No.2, the Act does not limit the matters that may be taken into account in determining whether the expectation is reasonable. Such matters will include, for example, whether there are any mutual undertakings that are to be inferred from conduct or implied that take effect as contractual variations, or any subsequent express contractual variation. Matters may also include the period of employment, representations made (and by whom), rostering arrangements (particularly those made amply in advance), the industry in which the work is performed, and so on.”

[68] Was there an expectation?

[69] I conclude there was. The evidence establishes that Mr Kumnick had a subjective expectation of continuing employment by the employer on a regular and systematic basis. He organised his affairs, including his primary employment elsewhere, to accommodate this secondary work so as to commence no earlier than 3.30pm weekdays.

[70] FedEx submit that Mr Kumnick did not hold such expectation as a matter of fact because he acknowledged in evidence that his contract, and the revised contract offer, stated the opposite, and that his work with FedEx was in any event a minor second job.

[71] I do not accept this submission. Whilst Mr Kumnick acknowledged that the employer’s position was that he could have no such expectation, his evidence was that he made himself available on a consistent basis to work on at least one day per week, and generally a Friday, and he was so rostered by the employer. That Mr Kumnick continued to make himself available to again be rostered after having been rostered supports a conclusion that he had an expectation of ongoing employment on that basis.

[72] Nor is the existence of an expectation discounted by reference to a low number of rostered shifts worked per week or that his work was a second job. There is no reason why an employee who makes themselves available to work a small number of shifts in a week necessarily has less of an expectation of ongoing employment than an employee who makes themselves available for multiple shifts.

[73] Was the expectation reasonable in objective terms?

[74] The advance roster used by FedEx together with the regular and systematic nature of shifts offered and worked by Mr Kumnick as a casual employee weigh in favour of a finding that Mr Kumnick had a reasonable expectation of continuing employment on a regular and systematic basis during his period of service as a casual, until taken off the roster.

[75] FedEx submit that the written terms of the contract of 6 April 2017 which established the legal framework for the allocation of work to Mr Kumnick “negates any expectation”. 20

[76] The contract included the following term: 21

“The Company makes no commitment to provide you with regular or ongoing employment.”

[77] The contract is a relevant consideration which weighs against a finding that a reasonable expectation existed. However, the practical manner in which the contract operated is also relevant.

[78] In the circumstances of this matter, the performance of the contract and the course of dealings between the parties over a period of five years including the offer and acceptance of casual shifts on a regular and systematic basis over a lengthy period weighs strongly in the other direction.

[79] The High Court has, in recent decisions concerning whether a person is a casual employee, determined that when characterising a relationship regulated by a wholly written, comprehensive contract which is not a sham or otherwise ineffective, the question is to be determined solely by reference to the rights and obligations under that contract. It is not permissible to examine or review the performance of the contract or the course of dealings between the parties. 22

[80] Does this approach apply to this matter?

[81] If Mr Kumnick’s contract were to be the sole consideration, given its terms, he could not in an objective sense have had a reasonable expectation of continuing employment on a regular and systematic basis. This proposition would not be made out.

[82] Although a singular written contract regulated the terms of casual work performed by Mr Kumnick, the nature of the inquiry required by s 384(2)(a)(ii) is not the same as characterising a relationship as employee or contractor, or as between casual or other employment. Section 384(2)(a)(ii) requires a different and statutorily specific finding of fact to be made: whether Mr Kumnick had a reasonable expectation of continuing employment on a regular and systematic basis.

[83] Given the specific statutory nature of the issue to be determined, and given that it requires a finding of fact that bears on both subjective and objective expectation, I do not consider that the necessary inquiry is limited to the terms of the contract.

[84] FedEx also submit that from 2 March 2022 when taken off the roster, and for the next seven weeks, Mr Kumnick could not have reasonably held an expectation of ongoing casual employment on a regular and systematic basis because he had not agreed to terms set by his employer that were preconditions to offers of future casual shifts.

[85] Whilst superficially attractive, the difficulty with this submission is that, if it were to be accepted, Mr Kumnick’s views about the employer’s revised casual contract being unfair would not be able to be litigated in unfair dismissal proceedings simply because he refused to make himself available to work on the very terms he is litigating are unfair.

[86] Such a construction of s 384(2)(a)(ii) is to be avoided. In Chandler v Bed Bath N Table Pty Ltd, and whilst dealing with a different casual contract, a full bench of the Commission observed: 23

“The excerpted passage did no more than set out the basic incidents of all casual employment. That could not be relevant or significant in determining whether Ms Chandler’s casual employment was of a type to which s 384(2)(a)(ii) applied. Were the contrary the case, no casual employment could ever fall within s 384(2)(a)(ii).”

[87] The better construction of s 384(2)(a)(ii) is that the existence of a reasonable expectation of continuing employment by the employer on a regular and systematic basis is to be determined not by a proposed contract, but by the contract under which the casual work was in fact performed and by other relevant circumstances relating to the performance of that work.

[88] For these reasons, I conclude that Mr Kumnick had a reasonable expectation of continuing employment on a regular and systematic basis until taken off the roster.

[89] Section 384(2)(a)(ii) is made out.

[90] As ss 384(2)(a)(i) and (ii) are satisfied, Mr Kumnick’s service as a casual in the six months prior to his alleged dismissal counts for the purposes of the minimum employment period.

[91] Moreover, the gaps between the shifts worked by Mr Kumnick in those six months did not relevantly interrupt service. As noted, gaps between casual contracts of work do not necessarily break service because it is the employment relationship and not the contract that is assessed for continuity. Nor were they “excluded periods” under s 22 of the FW Act as I do not consider they were relevantly “unpaid authorised absences” given that Mr Kumnick was not absent from rostered work on those days.

[92] Mr Kumnick had been relevantly employed for at least six months prior to dismissal.

Conclusion

[93] Mr Kumnick’s application is within jurisdiction. Having served the minimum employment period, he was a person protected from unfair dismissal. He was eligible to make a claim under s 394 of the FW Act.

[94] The jurisdictional challenge by FedEx is dismissed.

[95] As the application has not been the subject of conciliation, I direct that the matter be referred for conciliation.”

Kumnick v FedEx Express Australia Pty Ltd (2022) FWC 2432 delivered 13 September 2022 per Anderson DP