Unfair dismissal; calculating length of service of casuals

Here is an extract from a Fair Work Commission case which sets out how to calculate length of service for unfair dismissal cases concerning casuals.

“Legislative framework

[4] A person must have completed a period of employment with his or her employer of at least the minimum employment period to be protected from unfair dismissal (s 382(a) of the Act). The minimum employment period for a small business employer is 12 months (s 383 of the Act).

[5] A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at the time (s 23(1) of the Act). For the purpose of calculating a number of employees employed by the employer at a particular time:

(a) all employees employed by the employer at the time (including the dismissed employee who has made the unfair dismissal application) are to be counted subject to the caveat that a casual employee is not to be counted unless, at the time, he or she has been employed by the employer on a regular and systematic basis (ss 23(2) & (4) of the Act); and

(b) associated entities are taken to be one entity (s 23(2) of the Act). The expression “associated entity” has the meaning given by section 50AAA of the Corporations Act 2001 (Cth) (the Corporations Act).

[6] 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 (s384(1) of the Act).

[7] The meaning of continuous service is dealt with in s 22 of the Act. Section 22(1)-(3) of the Act provides:

“22  Meanings of service and continuous service

General meaning

(1)  A period of service by a national system employee with his or her national system employer is a period during which the employee is employed by the employer, but does not include any period (an excluded period) that does not count as service because of subsection (2).

(2)  The following periods do not count as service:

(a)  any period of unauthorised absence;

(b)  any period of unpaid leave or unpaid authorised absence, other than:

(i)  a period of absence under Division 8 of Part 2-2 (which deals with community service leave); or

(ii)  a period of stand down under Part 3-5, under an enterprise agreement that applies to the employee, or under the employee’s contract of employment; or

(iii)  a period of leave or absence of a kind prescribed by the regulations;

(c)  any other period of a kind prescribed by the regulations.

(3)  An excluded period does not break a national system employee’s continuous service with his or her national system employer, but does not count towards the length of the employee’s continuous service.”

[8] Section 384(2)(a) of the Act is also relevant. It provides:

“(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 on a regular and systematic basis; 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…”

[9] In Bell v Aboriginal Legal Service (NSW/ACT) Limited, 1 a Full Bench of the Commission made the following observations in relation to s 384(2) of the Act (references omitted):

“[10] It is evident that s.384 does not proceed on the basis that a casual employee’s period of employment starts and ends with each separate contract of employment, as understood in the common law of employment.  Periods of casual employment punctuated by gaps between successive contracts may be included in a casual employee’s period of employment, depending on whether the employment was on a regular and systematic basis. It is the employment that must be on a regular and systematic basis, not the hours worked, but a clear pattern or roster of hours is strong evidence of regular and systematic employment.

[11] The word “regular” should be construed liberally.   It implies some form of repetitive pattern and does not mean frequent, often, uniform or constant. Employment on a “regular” basis may be constituted by frequent though unpredictable engagements. The word “systematic” requires that the engagement be “something that could fairly be called a system, method or plan”.  The concept of engagement on a “systematic” basis does not require the employee to be able to foresee or predict when his or her services may be required. It is sufficient that the pattern of engagement occurs as a consequence of an ongoing reliance on the employee’s services as an incident of the business by which he or she is engaged.

[12] The Act does not define the phrase “reasonable expectation of continuing employment”, nor does it set out any particular matters which should be taken into account in assessing whether a particular employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis during that employee’s period of service as a casual employee. Whether an employee had such an expectation will depend on the particular circumstances.

[13] It is also to be observed that the relevant “reasonable expectation” in s.384(2)(a)(ii) is as to continuing employment with the employer on a regular and systematic basis. This plainly suggests that the relevant reasonable expectation is as to continuing casual employment by the employer on a regular and systematic basis. Were it otherwise, the words “on a regular and systematic basis” would be otiose. The connection between “employment as a casual employee” and “on a regular and systematic basis” is established by s.384(2)(a)(i) and that connection seems to us to be maintained in s.384(2)(a)(ii). Section 384(2) is concerned with the circumstances in which a casual employee’s period of service as a casual employee is included in that employee’s period of employment for the purposes of s.383.”

[10] In Bronze Hospitality Pty Ltd v Hansson, 2 a Full Bench of the Commission gave guidance as to the meaning of the expression “reasonable expectation of continuing employment” in s 384(2)(a)(ii) of the Act (references omitted):

“[29] We make some observations about the construction of s.384(2)(a)(ii). First, ‘during’ can mean either ‘throughout the course of’ or ‘at a point in the course of’. In our view, the first of these meanings is intended. The sub-provision is an exception to an exception; a period of casual service does not count, unless two requirements are met. Both of these requirements concern states of affairs that can develop over time. This context points to the word ‘during’ connoting a continuous period, rather than a point in time. Further, the alternative construction would mean that a casual employee need only have a reasonable expectation of continuing employment for any fleeting period in the course of the casual employment. There is no apparent rationale that would support this being the intended meaning. Finally, we note that the explanatory memorandum to the Fair Work Bill states simply that ‘service as a casual employee does not count towards the period of employment unless it was on a regular and systematic basis and the employee had a reasonable expectation of continuing engagement on a regular and systematic basis.’ This wording is consistent with the interpretation we favour, and inconsistent with a ‘point in time’ meaning. The effect of this is that a particular period of service as a casual employee only ‘counts’ in respect of periods when the casual employment was regular and systematic and the employee had a reasonable expectation of continuing employment.

[30] Secondly, the continuing employment that is to be the object of the reasonable expectation is employment as a casual employee. So much is clear from the reference to ongoing employment on a ‘regular and systematic basis’. However, if an employee has an expectation of future permanent employment, this might be relevant to whether the employee also had an expectation of continuing casual employment pending the commencement of permanent employment.

[32] Bronze’s principal contention in its third ground of appeal was that it is not possible for a casual employee to work on a regular and systematic basis, or to have or develop a reasonable expectation of continuing employment, after some eight weeks of casual work. We reject this contention. As we have said above in relation to s.23, there is no minimum period of time that is required in order for casual employment to assume a regular and systematic character, nor is any minimum period necessary for an employee to develop a reasonable expectation of continuing employment. This can be simply illustrated by the example of a casual employee who is told on commencement that his or her casual employment will be ongoing, as well as regular and structured in some way, and who is then rostered accordingly.

[33] Where nothing is said about the regularity or system of engagement, or its possible duration, all of the circumstances are to be considered in order to ascertain whether s.384(2) is engaged. Clearly upon a person’s first engagement, without more, one could not speak of regularity or system, and in the very early phase of a casual employment relationship it may be difficult to substantiate that it is either regular or systematic, or that any reasonable expectation exists as to ongoing employment. However, a short period might well be sufficient, depending on the circumstances. The question in the present matter is whether it was reasonably open on the evidence for the Commissioner to conclude that Ms Hansson’s circumstances fell within s.384(2).”

Baker v Orr T/A CORR Hair Artistry (2020) FWC 4696 delivered 2 September 2020 per Saunders DP