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2 key decisions on leave entitlements

Recent decisions handed down by the High Court and the Victorian Court of Appeal have significance for employee statutory leave entitlements.

#1 Paid leave entitlements for casual employees

In Workpac v Rossato (2021), the High Court reversed on appeal a decision of the Full Federal Court that granted National Employment Standard (NES) paid leave entitlements to a labour hire worker classified and paid as a casual employee. The High Court ruled the worker was not entitled to paid leave entitlements under the Fair Work Act 2009 (Cth) (FW Act) because his employment fell within the expression of casual employee in the FW Act.

The decision did not affect the principle established by the Federal Court (and since adopted in the definition of casual employment in the FW Act), that a casual employee, for the purposes of the FW Act, is an employee who has no firm advance commitment as to the duration of the employment or the days (or hours) of work. The High Court simply took a different view based on the facts and circumstances of whether such a firm advance commitment had been given to Mr Rossato by the employer.

The High Court examined the worker’s employment contract and determined that these provided for work assignments to be offered and accepted discretely, with the worker having the choice to accept or reject each offer of an assignment and the employer having no obligation to offer any further assignments. According to the Court, this showed that the parties deliberately avoided a firm commitment to ongoing employment once a given assignment had been completed.

#2 Long service leave accrual

In Infosys Technologies v Victoria (2021), the Victorian Court of Appeal was asked to rule whether two employees who had worked both outside and within Victoria should have their service outside Victoria counted towards their long service leave entitlements.

The employees were employed by a company incorporated in India. Each claimed an entitlement under Victorian long service legislation based over the entire period of service with the employer. Prior to the service in Victoria, each employee worked for the employer outside Victoria.

Employee one worked 3.5 years in India, 11.5 months in the UK, then returned to India for 3.6 years before working 2.3 years in Victoria. Employee two worked 9.6 years in India followed by 2.3 years in Victoria.

The employer argued that only the employment with a continuous connection with Victoria should give rise to a long service leave entitlement under Victorian legislation. Employment outside Victoria could only have that connection if the employee worked under directions emanating from Victoria or where the employment first started in Victoria. Given that, before the employees transferred to Victoria, their employment had no relevant connection with Victoria, the employees’ long service leave entitlement could only arise based on the service they had in Victoria (which, given it was less than 3 years, did not give rise to any entitlements).

The Victorian Court of Appeal accepted the employer’s argument. In doing so, it rejected the argument put by the State of Victoria (which was prosecuting the employer for non-payment of long service leave) that so long as the triggering event for the long service leave was in Victoria (i.e. the request or direction to take the leave, or the cessation of employment), then all employment is taken into account, regardless of where it was served. In rejecting this argument, the Court noted that long service leave entitlements accrued over time based on service, and didn’t just crystallise when a ‘triggering event’ occurred.

The Court of Appeal also disagreed with the majority decision of the Federal Court in Cummins South Pacific Pty Ltd v Keenan (2020), which allowed an amalgamation of continuous service periods in different jurisdictions if the entire period taken as a whole had a substantial connection to Victoria. If that was the case, according to the Federal Court majority, it did not matter that part of the employment had no connection to Victoria. This approach, according to the Victorian Court of Appeal, would produce anomalous results. An employee might accrue long service leave on employment that has no immediate or intended connection with Victoria at the time it is performed. There would not be any compliance by the employer with the maintenance of long service leave records, given it would not anticipate a claim for an entitlement under Victorian legislation.

While this decision concerns Victorian long service leave legislation, it has implications for all state and territory legislation dealing with this entitlement.

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