FEDERAL COURT OF AUSTRALIA

Ledger v Stay Upright Pty Ltd [2016] FCA 659

ORDERS

THE COURT ORDERS THAT:

1.    The application be dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BUCHANAN J:

1    The respondent (“Stay Upright”) is a company which provides motorcycle training services. The first and second applicants were employed by Stay Upright. The overall periods (or individual periods) of employment are not at issue. Stay Upright contends that each was employed during those periods on a casual basis. That is the central question in the proceedings.

2    Mr Aaron Ledger was engaged as a “senior instructor” and Mr Leslie Reynolds was engaged as an “instructor”, although in each case the base rate of pay as at 21 January 2014 was $32 per hour. Mr Ledger’s first engagement relevant to the present proceedings commenced on 7 October 2007 and he continued (and continues) to be engaged thereafter, or was engaged from time to time, as explained hereunder. Mr Reynolds’ first engagement commenced on 21 October 1996 and his engagements ceased on 19 May 2015.

3    During the period of those engagements, Stay Upright did not afford either applicant annual leave and made no payment of annual leave to Mr Reynolds on the completion of his engagement(s). Stay Upright did not afford either applicant (or pay for) any other form of leave although it is agreed that each of them was absent, or unavailable for work, at particular times or during particular periods, either through injury or for their own reasons. Stay Upright contends that from the commencement of operation of the Educational Services (Post-Secondary Education) Award 2010 (Cth) (a modern award made under the Fair Work Act 2009 (Cth) (“the FW Act”)) (“the award”), the engagement(s) of Mr Ledger and Mr Reynolds was/were covered by the terms of that award and they were engaged as casual employees under it.

4    Mr Ledger and Mr Reynolds deny that they were engaged as casual employees, whether under the award or otherwise. Their primary contention is that they were directly covered by the National Employment Standards (“NES”) prescribed by the FW Act from 1 January 2010 (when the NES came into operation), that both before and after that time they were award-free and that at all relevant times the Annual Holidays Act 1944 (NSW) applied (from 1 January 2010 pursuant to its adoption by the FW Act). Alternatively, they accept that the award applied to them, but not as casual employees.

5    Before the commencement of the FW Act on 1 January 2010 the Workplace Relations Act 1996 (Cth) (“the WR Act”) prescribed the Australian Fair Pay and Conditions Standard (“AFPCS”) which for employees of constitutional corporations, amongst others, prevailed over contracts of employment (see WR Act s 172(2) and s 173). The applicants relied also on the AFPCS in the period before 1 January 2010. As I discuss hereunder, the relevant aspects of the AFPCS did not apply to casual employees.

6    Stay Upright pleaded that:

9.    …

(b)    at all material times, the Respondent adopted a practice whereby it:

(i)    usually issued a request to all Instructor employees, including the Applicants, to provide their availability for work in a following calendar month, around four (4) weeks before the commencement of that calendar month; and

(ii)    provided all Instructor employees with around one (1) week to respond to it and provide their availability for the particular calendar month;

(c)    in requesting that all Instructor employees advise their availability for a particular calendar month, the Respondent was not offering work to any particular employee on any of the days on which the employee notified their availability;

(d)    it allocated shifts to Instructor employees, including the Applicants based on its operational needs and the employees’ availability with such shifts being:

(i)    allocated only on days where an Instructor had responded in time and indicated that he/she is available to work on that particular day in that particular month; and

(ii)    where the shift was required based on the Respondent’s anticipation of workload, student numbers and class type;

(iii)    allocated in varying and fluctuating numbers throughout the each year based on seasonal consumer demand for lessons; and

(iv)    subject to cancellation once allocated, if student numbers reduced to a level whereby that class was then merged with another class, or cancelled altogether; and

…

7    As no reply was filed by the applicants, issue was joined on those contentions, which expose the central issue of whether the applicants’ employment was casual or not.

8    The parties agreed that the following matters were in contention as to that issue:

Status of Employment

4.    The Applicants contend that they are/were in fact at no time casual employees working for the Respondent. The Applicants contend that they performed regular and systematic hours of work pursuant to rosters set a number of weeks in advance of the performance of the work.

5.    The Respondent contends that the Applicants are/were at all times:

(a)    employed on a casual basis;

(b)    paid as casual employees for each hour of work;

(c)    performed work on an as needed basis as required by the Respondent; and

(d)    only allocated shifts of work based on the Respondent’s operation needs and only on days where the Applicants had advised the Respondent they were available and willing to work; and

as such, the Applicants were not employed on a regular and systematic basis.

6.    The Respondent contends that at all material times, it paid each of the Applicants a rate of pay that was in excess of the minimum rate of pay for the Applicants under the Modern Award, inclusive of any casual loading.

9    The parties also agreed that the following specific contentions may require consideration:

First Applicant

Compassionate Leave

7.    The First Applicant contends that he was absent from work in his employment with the Respondent because of the death of his mother on 9 and 10 November 2010 for which he was entitled to be paid by the Respondent for two days’ compassionate leave to the value of $512.00. The First Applicant further contends that the Respondent contravened section 44(1) of the Act by failing to pay him compassionate leave.

8.    The Respondent contends that:

(a)    the First Applicant did not request to take a period of compassionate leave on 9 and 10 November 2010;

(b)    it was not aware of the purported reason for the First Applicant’s absence from work on 9 November 2010;

(c)    the First Applicant did attend work on 10 November 2010 and was paid for that work at the applicable hourly rate at the time the work was performed, being $26.75; and

(d)    the First Applicant was not entitled to paid compassionate leave in the amount claimed by the First Applicant or at all.

Annual Leave

9.    By reason of the facts in A to I inclusive and Contentions in 1, 3 and 4 above, the First Applicant contends that the Respondent ought to have accrued annual leave entitlements for him dating back to commencement of his employment with the Respondent on 7 October 2007.

10.    The Respondent contends that the First Applicant was not entitled to accrue annual leave at any time during the course of his employment with the Respondent.

11.    Further, and in the alternative, the Respondent contends that the period of time in which the First Applicant may claim an entitlement to accrued annual leave is limited to six years pursuant to section 544 of the Fair Work Act 2009 (Cth) and not as and from the commencement of the First Applicant’s employment.

Second Applicant

Annual leave

12.    As at 19 May 2015, the Second Applicant contends that he had accrued but untaken annual leave of 74 weeks (calculated as four weeks for every year of service multiplied by 18.5 years).

13.    On 19 May 2015, the Second Applicant contends that the Respondent was liable to pay him for his untaken paid annual leave in the amount of $89,984.00 plus interest, pursuant to section 90(2) of the Act.

14.    The Respondent contends that the Second Applicant was not entitled to accrue annual leave at any time during the course of his employment with the Respondent.

15.    Further, and in the alternative, the Respondent contends that the period of time in which the Second Applicant may claim an entitlement to accrued but untaken and/or unpaid annual leave is limited to six years pursuant to section 544 of the Fair Work Act 2009 (Cth) and not as and from the commencement of the Second Applicant’s employment.

Personal leave

16.    The Second Applicant contends that he was absent from work in his employment with the Respondent due to a personal illness affecting him in the following periods:

(a)    27 February 2012 to 26 March 2012; and

(b)    18 May 2012 to 2 July 2012.

17.    The Respondent contends:

(a)    it is not aware of the purported reason for the Second Applicant’s absence from work from 27 February to 26 March 2012 and from 18 May to 2 July 2012; and

(b)    the Second Applicant did attend work from 2 May to 23 May 2012 and on 2 July 2012 and was paid for that work at the applicable hourly rate at the time the work was performed, being $30.92.

18.    The Second Applicant contends that the Respondent is liable to pay him for his absence due to personal illness in the amount of $13,056.00 plus interest and that the Respondent contravened section 44(1) of the Act by failing to pay him personal/carer’s leave.

19.    The Respondent contends that the Second Applicant was not entitled to accrue or be paid personal/carer’s leave in the amount claimed by the Second Applicant or at all.

20.    The Second Applicant contends that a pecuniary penalty ought to be imposed on the Respondent and ordered to be paid to him pursuant to subsection 546(3)(c) of the Act.

21.    The Respondent contends that there is no basis upon which a pecuniary penalty ought be imposed against it in respect of the employment of the Second Applicant.

10    Following the filing of a statement of agreed facts and the statement of agreed contentions, each of the parties filed additional affidavit evidence.

11    As Mr Reynolds’ engagement(s) commenced first in time it is convenient to deal with his circumstances at the outset. His principal affidavit included the following:

Employment

…

7.    I was engaged by the Respondent with the following description as to my employment category; “casual and variable as required by Company operations”. Within my first 12 months working for the Respondent, I worked weekends only. I was paid for each hour of work I performed. After completing 12 months’ service with the Respondent from about October 1997, I started working approximately 40 hours a week.

8.    During the period from around 1998 to 2013, I worked on average, in excess of 38 hours per week, often working no less than 8 hours per day. A roster was provided by the respondent in relation to the work.

9.    On and from 2013, upon commencement of the Respondent’s new General Manager, Graeme Wilshaw, the roster changed although I continued to work on average, in excess of 38 hours per week.

10.    I worked with the Respondent for approximately 18.5 years.

…

Duties

…

15.    During my work day, I generally received a 20 minute paid break both in the morning and afternoon and also took a one hour lunch break, which was unpaid. …

Hourly Rates of Pay

16.    The Respondent issued me with a pay slip every week. My payslips identify my status as being “casual”. The pay slips do not identify any minimum rates of pay or casual loading. …

17.    On commencement of my employment with the Respondent, I was paid an hourly rate of $15.00, less applicable tax. After that, I received only minor increases in my pay over 18.5 years’ service with the Respondent.

…

19.    From in or around 2011 until January 2014, I was paid at an hourly rate of $30.92, less applicable tax. …

20.    From in or around January 2014 until termination of my employment, I was paid at a flat rate of $32.00 per hour, less applicable tax, except on occasions where I was asked to perform private tuition to students. On those occasions, I was paid a flat rate of $50.00 per lesson. Whilst the tuition with the student was one hour in duration, by the time I set up the motorcycle and the range, and packed everything away, it would take me at least 1 hour and 20 minutes in total. …

21.    As the Respondent operated its business 7 days per week, from the commencement of my employment up until in or around March 2014, I performed work on public holidays, weekends and evenings, often working up until 10.00pm on both weekdays and weekends. I was only paid my hourly rate for hours worked (apart from the flat fee for private tuition referred to above). At no time during my employment with the Respondent did I receive penalty rates or overtime for work performed on any of those days/shifts. At no time did I receive extra pay for any shifts that extended beyond 7.6 hours per day, or 38 hours per week.

…

Roster

27.    Since commencement of my employment, the Respondent operated a roster system for Instructors. In my first few years of service, the roster was typically released 3 months in advance and several years later the roster was released 1 month in advance. The Respondent requested the availability of employees to be sent through to them prior to the commencement of each month. I submitted my availability via facsimile indicating the days I was available to work. An employee of the Respondent either faxed me a personal copy of the roster or handed it to me whilst at work. They also posted a copy of the roster for all employees in the office at work. …

Absence from work

28.    At no time throughout my employment with the Respondent did the Respondent accrue any leave entitlements for me nor was I paid for any absence from work due to personal leave or annual leave. At no time did I take any of my accrued long service leave entitlement. Every absence I had from work since commencement of my employment was unpaid. This included one occasion in or around October 2009, where a male student collapsed on the road ride under my instruction and supervision. I performed CPR on this student until the ambulance arrived. Subsequently, the student died. Whilst I was rostered on to work the following day, I was too affected by the death of my student to attend work. I did not attend work and did not receive any pay.

Unplanned absences

29.    If I was unfit for work or needed to attend to a personal obligation, I was required to make arrangements for a colleague to replace me and perform my shift. Since commencement of my employment, the then General Manager, Wayne Carter said to me, words to the following effect:

“If you are sick or unable to attend work, you will need to make arrangements for someone to replace you and work your shift.”

…

Planned absences

37.    If I wanted to take any planned absences from work (i.e. holidays), I understood I was required to give the Respondent plenty of notice given that the rostering system was drafted in advance. For example, if I wanted to take leave in August, I would need to inform the Respondent in June. This was due to the fact that the rosters were drafted in advance. I based my understanding also on my previous conversations with Mr Carter about the need for staff to arrange their own replacement if they were unable to attend work.

38.    Throughout my employment, I can only ever recall taking one extended period of annual leave. In or around mid 2010, I took a holiday to Cape York and was absent from work for a period of approximately 3 months. [Not allowed] [I]n relation to the taking of annual leave, I submitted an annual leave form. The only other occasion where I took time off was typically between Christmas and New Year. I did not receive any pay during these periods nor was I paid for any period where I did not attend work. On a couple of occasions I did perform work over the Christmas and New Year period but typically did not perform work during this period.

39.    In or around February 2014, I received an email from Graeme Wilshaw, General Manager and Warwick Schuberg, Director of the Respondent. I no longer have a copy of this email but I can recall that it was sent to all Instructors informing us that no-one would be rostered to perform triple shifts anymore.

40.    Shortly after this email was sent to the Instructors, I was rostered to work significantly less hours than I had been receiving over the past couple of years and was no longer rostered to perform triple shifts (i.e. triple shift is defined as a 12.5 hour shift worked between the hours of 7.30am and 9pm). The triple shifts had been cut from the roster altogether from this point on. I continued to perform private lessons although these requests were significantly reduced and I was only asked to undertake these lessons on occasion.

12    I have set out the matters above in some detail because it is possible to make some observations arising from them.

13    Employment is a contractual relationship. The terms of the contract are established in accordance with the mutual intent of the parties at the outset, either expressly or by implication, although it may be possible in particular cases to draw inferences about the mutual intent of the parties at that time from their subsequent conduct.

14    It is apparent from the agreed statement of the parties’ positions that they each agreed that the nature of the engagement had not changed during the period of the engagement(s). The applicants contended that they were not ever casual employees; the respondent contended that the applicants were always casual. In the present case, at least, it is not necessary to come to grips with the possibility that the character of the engagement changed by mutual accord at some time after commencement. In that context, it is significant that the nature of the applicants’ engagements was stated at the outset to be “casual”. A feature of the pay arrangements supporting this characterisation, which applied throughout, is that payment was calculated hourly, corresponding to hours of work performed.

15    I should indicate, in any event, that I am satisfied for the reasons which appear hereunder that the nature of the engagement(s) did not change at some time after their commencement. I agree with the parties’ position that it was the same type of employment from beginning to end.

16    In Mr Reynolds’ case (although not in Mr Ledger’s) the initial stipulation of casual employment was somewhat confused by a period between 16 January 2002 and 1 September 2004 when his status was indicated on his payslips as “Part-Time” (there was no evidence about the position prior to that period). Nevertheless, it is apparent from even those payslips that the hours of work were not completely regular and varied from week to week, with corresponding variations in payment. Pay was calculated hourly. It is common ground that Mr Reynolds was not given any form of paid leave during that period. From 28 February 2008, for the balance of his engagements, Mr Reynolds’ status was given as “Casual”, consistently with the letter of engagement referred to hereunder. Pay continued to be calculated hourly and his weekly hours varied.

17    Permanent employment (whether full-time or part-time) is based on a regular periodic engagement (weekly at a minimum), generally with a corresponding period of notice (exceptions to this general position do not require discussion here). Casual employment, by contrast, is usually based on an hourly or daily engagement.

18    Somewhat in contradiction of those traditional practices, however, on 21 October 1996, Mr Reynolds was offered, and signed, an employment agreement/position description, which stated that it commenced on 21 October 1996 and remained in force thereafter. It contained the following provisions:

POSITION: STAY UPRIGHT INSTRUCTOR.

This agreement constitutes an individual employment agreement. The agreement and attached schedules set out the terms and conditions upon which the employee shall be engaged. It is acknowledged that this agreement is the whole agreement between the employee and the employer and unless specifically contained in this agreement, no other terms and conditions of any other agreement or award shall apply.

…

1. POSITION DETAILS.

The employee shall be employed in the position of a STAY UPRIGHT INSTRUCTOR. The employee agrees to discharge the duties of the position(s) to the satisfaction of the employer. A description of the position(s), duties and responsibilities is set out in the applicable Stay Upright Position Description.

2. EMPLOYMENT CATEGORY, HOURS AND RATES OF PAY.

The employment category and hours of employment for the employee are:

Casual and variable as required by Company operations.

The agreed rate of pay is on a per hour basis and includes allowances for holiday pay. Rostered and paid staff are covered by Workers Compensation and Superannuation entitlements as required by the applicable Act(s). Sickness entitlements and Long Service Leave provisions are not paid by the Company to a Casual Employee.

The agreed rates of pay for duties performed are as follows:

$ 15 per hour whilst Instructing students and conducting courses.

$ 11 per hour whilst travelling, loading, unloading on Company business.

$ 15 per hour for other duties as directed (i.e. promotion, cleaning).

The employee agrees that the hours paid for courses conducted will be determined prior to the course by the National Manager / State Manager.

…

5. GENERAL.

This employment agreement shall operate from the date of signing by both parties and shall remain in force unless varied or terminated by either party giving notice as required by the applicable Act(s). During the continuance of the agreement the employee shall be faithful to the Company in respect of the use and disclosure of documents, information and equipment acquired by the employee in the course of their employment with the Company.

Employees are to comply at all times with applicable Occupational Health and Safety standards, Equal Employment Opportunity standards, and road rules and laws whilst operating vehicles. Infringements incurred whilst operating vehicles are to be met by the employee.

Upon cessation of employment all Company owned articles and vehicles are to be returned to the Company. Within a period of twelve (12) months from separation of employment the employee shall not set up, operate as principle or be involved in the management of any similar business operation which utilises courses, procedures, knowledge or systems which have been learnt or gained whilst employed by the Company.

Termination, stand down and dispute settling provisions as detailed by applicable State and Federal Employee Relations Act(s) are deemed to be included in this agreement.

(Emphasis in original.)

19    This document appears to establish a contractual relationship of ongoing (sometimes called permanent) casual engagement. It could not do so contrary to the terms of a relevant statute or award but, if award-free, the parties were free to contract as they pleased.

20    Notwithstanding the potentially hybrid character of the engagement, it does appear to me that the contract which Mr Reynolds and the respondent made specified casual employment, payment only for work done, with no separate entitlement to annual leave or sick leave.

21    There is no suggestion of a further or different contract, or any resistance to the stated basis of the engagement before Mr Reynolds’ engagement was terminated (for unrelated reasons which require no attention in these proceedings).

22    The provisions of cl 2 of this document were ineffective to exclude a liability to make a payment on account of any accrued long service leave, even in the case of a casual employee, if the employee’s service was “continuous” (Long Service Leave Act 1955 (NSW), s 4(11)(a), inserted in 1985, Act No. 54 of 1985) and, in fact, Mr Reynolds was paid an amount for accrued long service leave when the arrangements with him were terminated in May 2015. That circumstance, however, is not destructive of the respondent’s contention that the applicants were, nevertheless, casual employees not entitled to annual leave, sick leave or compassionate leave.

23    Mr Ledger also signed a written agreement, dated 10 October 2007, after an initial period of work commencing on 29 September 2007. In his affidavit, he refers to the period covered by this agreement (i.e. from 7 October 2007) as his “second period of employment”. It is only that period which the case concerns. Mr Ledger, on his own evidence, deposed to working as a casual employee for Stay Upright from May 1994 to April 2002. That circumstance tends to confirm that he understood the practical significance of being again engaged from 7 October 2007 as a casual employee.

24    Mr Ledger’s affidavit stated:

The Respondent

…

10.    Since commencing my second period of employment, I have worked on average, in excess of 38 hours per week, working no less than 8 hours per day. I am paid for each hour of work I perform.

11.    I have worked with the Respondent for approximately 8 years.

Duties

…

13.    During my work day, I generally receive a 20 minute paid break both in the morning and afternoon and also take a one hour lunch break, which is unpaid. …

Hourly Rates of Pay

14.    The Respondent issues a pay slip every week although they are posted out to my home address monthly. My payslips identify my status as being “casual”. The pay slips do not identify any minimum rates of pay or casual loading. …

…

17.    From in or around 2011 until December 2013, I was paid at an hourly rate of $31.44, less applicable tax. …

18.    From in or around January 2014, my pay was increased to a flat rate of $32.00 per hour, less applicable tax, except on occasions where asked to perform private tuition to students. On those occasions, I am paid a flat rate of $50.00 per lesson. Whilst the tuition with the student is one hour in duration, by the time I set up the motorcycle and the range, and pack everything away, it takes me at least 1 hour and 20 minutes in total. …

19.    As the Respondent operates its business 7 days per week, from the commencement of my employment, I have performed work on most public holidays, weekends and evenings, often working up until 10.00pm on both weekdays and weekends. I am paid my hourly rate for hours worked (apart from the flat fee for private tuition referred to above). At no time during my employment with the Respondent have I received payment for penalty rates or overtime for work performed on any of those days/shifts. At no time have I received extra pay for any shifts that extended beyond 7.6 hours per day, or 38 hours per week.

…

Roster

31.    Since commencement of my employment, the Respondent has operated a roster system for Instructors. The roster was typically released 3 months in advance and several years later, 1 month in advance. Annexed to this affidavit and marked “ALL8” is a copy of a group email sent from Paul Willows, employee of the Respondent to me and my fellow Instructors dated 15 February 2012. The Respondent requested the availability of employees to be sent through to them prior to the commencement of each month. I submitted my availability via email. It was common practice for [not allowed] myself, to respond to any roster requests from the Respondent with the words “the usual”. This meant that I wanted to be rostered to work the same days and hours as the previous month. This practice was ongoing for years up until July 2013. It was at this time that Graeme Wilshaw took over the position of General Manager for the Respondent. Mr Wilshaw required us to submit our availability with greater specificity by stating the days and hours we were available to work. After the roster had been drafted, an employee of the Respondent either emailed me a personal copy of the roster or handed it to me whilst at work. They also posted a copy of the roster for all employees in the office at work. …

32.    From in or around 2008 to 2012, I had a consistent roster pattern which typically comprised of a 9 day fortnight worked on the following days:

(a)    Monday to Thursday, with Friday being my day off;

(b)    Saturday to Thursday work, then Friday through to Sunday off.

I was also often called upon to work the Friday, which meant I would often work 11-12 consecutive days without a day off.

33.    For the period from in or around 2012 onwards, I have typically worked 10 consecutive days, then have 4 days off.

34.    Up until March 2014, I could be rostered to work up to 3 learner/provisional (or a combination of both learners and provisional) courses in one day. This shift is commonly referred to as a “triple shift”. The triple shift is a 12 hour shift worked between the hours of 7.30am and 9pm. …

35.    In or around March 2014, I received an email from Graeme Wilshaw, General Manager for the Respondent. I no longer have a copy of this email but I can recall that it was sent to all Instructors informing us that no-one would be rostered to perform triple shifts anymore.

36.    Shortly after this email was sent to the Instructors, I was rostered to work approximately 8 hours a week less than I had been over the past 8 years. Triple Shifts are no longer rostered. On occasion, I continue to be asked to perform private lessons but these requests are a lot less frequent than they used to be. Since this email was sent, I typically work 5 shifts a week, eight hours per day.

Absence from work

37.    At no time since commencement of my employment with the Respondent did the Respondent accrue any leave entitlements for me nor was I paid for any absence from work due to personal leave, annual leave or compassionate leave. At no time did I take any of my accrued long service leave entitlement. Every absence I have had from work since commencement of my employment has been unpaid.

Unplanned absences

38.    If I am unfit for work or need to attend to a personal obligation, for many years, I was required to make arrangements for a colleague to perform my shift. If I was unable to find another employee to perform my shift, I was required to contact the then General Manager, Wayne Carter and advise him of the action I had taken to try to find a replacement. Mr Carter sourced a replacement only in circumstances where I had attempted to find a replacement. This was common practice in the workplace during Mr Carter’s tenure as General Manager. Mr Carter often spoke/reminded us of this practice in our Instructors’ meetings.

…

Planned absences

41.    If I wanted to take any planned absences from work (i.e. holidays), I knew I was required to give the Respondent plenty of notice given that the rostering system was drafted in advance. I recall several conversations I had with Mr Carter where he said to me, words to the effect:

“Can you give me as much notice as possible when taking any leave.”

42.    Throughout my employment, I have typically taken 4 weeks annual leave each year. In accordance with the Respondent’s practice in relation to the taking of leave, I submitted a leave form. I was not paid for these periods of absence whilst on annual leave. …

43.    I do not work Christmas Day, Boxing Day and New Years Day as the Respondent does not operate on these days. I typically work all other days around the Christmas and New Year period. I do not receive any extra pay for working during this period nor am I paid for any period where I do not attend work.

25    Mr Ledger’s references to hours, shifts or work patterns which were “usual” or which he “typically” nominated, however, obscures the fact that there were variations in his hours and days of work pursuant to those arrangements. Those variations were reflected, on the evidence, in the calculation of pay.

26    Mr Ledger’s employment agreement/position description was in very similar (although not identical) terms to Mr Reynolds’. The differences are not material for present purposes. The observations I made earlier regarding Mr Reynolds’ employment agreement/position description are equally pertinent, therefore, to Mr Ledger.

27    The respondent’s evidentiary case in response consisted in part of an affidavit by the current General Manager of Stay Upright, Mr Graeme Wilshaw, dated 11 January 2016. Mr Wilshaw could give no direct evidence of the terms of engagement of either applicant although he was able, by reference to the respondent’s business records, to give some evidence about the hours worked by Mr Reynolds from (and including) the financial year ended 30 June 2002 and by Mr Ledger from (and including) the financial year ended 30 June 2008.

28    By an affidavit dated 12 January 2016 Ms Megan Bowe, a partner in the firm of solicitors acting for Stay Upright, deposed to correspondence and a conversation with Mr Wayne Carter, the former General Manager of Stay Upright, in December 2015. Mr Wilshaw deposed that Mr Carter’s employment with Stay Upright came to an end by resignation effective 28 June 2013. Mr Carter was General Manager when Mr Reynolds and Mr Ledger were offered, and signed, their respective letters of engagement.

29    Ms Bowe’s affidavit recounted a conversation with Mr Carter (supported by a contemporaneous file note) wherein Mr Carter, upon being asked for his assistance in responding to the affidavits of the applicants, referred to the fact that he was undergoing medical treatment, had “other things” he was focussed on and did not want to get involved.

30    Later, in February 2016, another solicitor employed by the applicants’ solicitors, Mr Marcellus Dignam, had further discussions with Mr Carter and prepared a draft affidavit based on those discussions which was served on the respondent on 26 February 2016. Mr Dignam was, however, advised by a solicitor acting for Mr Carter that Mr Carter was unable to provide affidavit evidence for the applicants because of his ill health. Mr Dignam subsequently sought, and was granted, leave to issue a subpoena to Mr Carter to give oral evidence. That subpoena was not called on. In the result, there was no evidence from Mr Carter, direct or indirect, which might bear on the character of the applicants’ employment.

31    The respondent also relied on an affidavit by Mr Wayne Clarke, the Instructor Development Manager of Stay Upright, who has been employed by Stay Upright since 1993. He was promoted to his present position in 2010 and was previously an Instructor.

32    Mr Clarke swore that he was employed as an Instructor on a casual basis until early October 2001, and thereafter on a permanent basis. Mr Clarke’s evidence of the practice of allocating work to him until 2001 (i.e. while he said he was employed on a casual basis) included the following:

10.    During this time, the Respondent did not provide me with work on dates I had indicated I was unavailable. I was only allocated shifts on days that I had indicated I was able to work. This generally fluctuated from month to month depending on my personal commitments and also the level of rider enrolment numbers or, in other words, the demand for classes. During the quieter winter months, the Respondent generally scheduled fewer classes and it was not uncommon for some of my allocated shifts to be cancelled during these months due to insufficient rider numbers. Similarly, it was not uncommon for me to be allocated shifts on every available date in the busier summer months. When classes were cancelled, Mr Carter would say to me words to the effect:

“We haven’t got any bookings for the course in 2 days, we’re going to have to cancel you for that day”.

We were generally given at least a couple of days’ notice of the cancelation of any classes. Despite the fluctuation, I enjoyed the flexibility this arrangement provided me to only work the days I wanted to and to pursue other interests such as travel.

33    However, Mr Clarke did not refer to, much less provide, any document or other objective material to support his assertions about the underlying character of his employment before and after October 2001. His statements about those matters must therefore be regarded no more highly than as lay opinion and, as the foundation for the opinion was in any event not disclosed, I am not disposed to give the statements any weight adverse to the interests of the applicants.

34    A good deal of evidence was given by the applicants about conversations in 2013 concerning whether they were covered by the award, or any award. Mr Clarke referred in his affidavit to various claims by the applicants about particular incidents at work, and conversations, and gave a different version of the events. I am not going to discuss all those matters because they do not seem to me to be relevant to the legal issues which must be determined.

35    The terms of contracts made in 1996 or 2007, and the scope and application of the AFPCS before 1 January 2010, of the award from 1 January 2010 and the NES, or of the Annual Holidays Act before and after that date, cannot be ascertained by reference to any of those matters. Nor does Mr Wilshaw’s general evidence about the current operating procedures of Stay Upright assist in that regard.

36    The applicants filed further affidavit evidence in reply. That further evidence from Mr Reynolds and Mr Ledger consisted largely of reference to, and repetition of, their earlier evidence and some bare denials of the evidence of Mr Wilshaw or Mr Clarke.

37    No additional light was shed on the terms of the engagement except (in Mr Ledger’s case) to make the point that he submitted timesheets weekly and was paid weekly.

38    No issue was taken with the business records referred to by Mr Wilshaw, although various attempts were made to suggest that different calculations or conclusions based on those records were appropriate – e.g. that average hours of work per week were higher because of periods of unpaid leave.

39    Additional commentary was offered about some of the conversations. In addition, several paragraphs of an affidavit affirmed by Mr Ledger’s partner, Ms Sonja Scherer, were read. Those paragraphs do not appear to me to bear upon the issues for decision at the present time.

40    One matter, arising from Mr Ledger’s reply, is worthy of mention again although I referred to it earlier. Apart from the periodic allocation of work through the rostering system, it seems clear that payment was based on the provision of a timesheet each week in which work was performed, which recorded actual hours worked in that week, and that payment was then made to reflect, and pay for, those hours worked and those hours only.

41    It is clear from the timesheets that the pattern of weekly hours was not fixed in the case of either Mr Reynolds or Mr Ledger. Rather, there was some weekly variation in hours worked which was reflected in the payments made.

42    The parties agreed that, before 1 January 2010, no federal or State award applied to the engagement(s) or employment of the applicants. The AFPCS under the WR Act stated entitlements to annual leave and personal leave (including sick leave) but excluded casual employees from those entitlements (WR Act s 227 and s 239(1)). Resolution of whether any entitlement arose under the AFPCS depends, in the first instance therefore, on whether the applicants were casual employees before 1 January 2010.

43    If the applicants were casual employees, the Annual Holidays Act may nevertheless have had the consequence that annual leave accrued or was payable on termination. I will consider this possibility in due course.

44    For the position after 1 January 2010, the respondent contended (and the applicants accepted in the alternative only) that the award applied. I will examine that contention although, as will appear hereunder, it is not necessary to come to a definite conclusion about it. If the award did not apply it is clear that the NES under the FW Act applied. This is the applicants’ primary contention. In either case, the critical question is whether the applicants were casual employees.

45    The following award coverage is stated in cl 4 – Coverage of the award (at cll 4.1, 4.3(a) from 1 January 2010, when it commenced):

4.    Coverage

4.1    This industry award covers employers throughout Australia in the post-secondary educational services industry and their employees (other than trades, cleaning or maintenance staff) employed in the classifications listed in Schedule B—Classifications—Academic Teachers, Schedule C—Classifications—Teachers and Tutor/instructors and Schedule D—General staff, to the exclusion of any other modern award.

…

4.3    To avoid doubt, the post-secondary educational services industry includes:

(a)    vocational education and training (VET) teaching leading to qualifications recognised within the AQF;

46    Relevant definitions in cl 3 are:

3.    Definitions and interpretation

3.1    In this award, unless the contrary intention appears:

academic teacher means an employee engaged to teach students, where a majority of the employee’s teaching work is in the delivery of units or programs which are at bachelor’s degree level or higher academic level, including the delivery of units which are intended subsequently to be accepted without discount as credit towards a degree

…

teacher means an employee engaged to teach students where a teaching qualification is mandatory or required by the employer, and where the work required involves teaching a course of study or units of work recognised within or pursuant to the Australian Qualifications Framework or accredited by a relevant state or territory authority and which is neither the work of an academic teacher nor a tutor/instructor

…

tutor/instructor means an employee engaged in providing tutoring/instruction to students where the course is not accredited and where the employer may not require a teaching qualification and which is neither the work of an academic teacher nor a teacher

47    The types of employment covered are stated in cl 10 – Types of Employment:

10.    Types of employment

10.1    Employees under this award will be employed in one of the following categories:

(a)    full-time employment;

(b)    part-time employment;

(c)    casual employment; or

(d)    sessional employment.

10.2    Full-time employment

A full-time employee is an employee who is engaged to work the ordinary hours of work set out in clause 21—Ordinary hours of work.

10.3    Part-time employment

(a)    A part-time employee is an employee employed for less than the normal ordinary hours specified for a full-time employee, or in the case of a teaching staff member for less than the face-to-face teaching load of a full-time teaching staff member at that workplace, for which all award entitlements are paid or calculated on a pro rata basis by reference to the time worked.

(b)    Before engagement the employer and the part-time employee will agree in writing on a regular pattern of work, including the number of hours to be worked each week, the days of the week the employee will work, the starting and finishing times each day where hours are not averaged and any periods during a year when work by the employee will not be required.

(c)    Changes in hours may only be made by agreement in writing between the employer and the employee.

(d)    An employer is required to roster a part-time employee for a minimum of two consecutive hours on any day.

(e)    A part-time employee employed under the provisions of this clause must be paid for ordinary hours worked at the rate of 1/38th of the weekly rate prescribed for the class of work performed.

(f)    Except where hours are averaged, all time worked in excess of the hours mutually arranged will be overtime and paid for at the appropriate overtime rate.

10.4    Casual employment

(a)    A casual employee is engaged and paid by the hour.

(b)    A casual employee will be paid in accordance with the provisions of clause 14.5.

(c)    A casual employee must be paid at the termination of each engagement, or in accordance with the usual payment methods for full-time employees.

(d)    For teachers and tutor/instructors, the minimum payment for each engagement will be for two hours’ work calculated in accordance with clause 14.5(b). For general staff the minimum payment will be for three hours’ work at the appropriate rate.

10.5    Sessional employment

This clause applies only to teaching staff members.

(a)    A sessional employee is an employee engaged to work on a full-time or part-time basis for a specified period or periods of not less than four weeks or more than forty weeks in any calendar year.

(b)    A sessional employee will be paid at the same rate and be entitled to the same conditions as those prescribed for a full-time or part-time teacher with the same qualifications, experience and teaching load.

(c)    On termination of a sessional engagement, an employee may elect to be paid out accrued annual leave entitlements or have the employer preserve them for use during a subsequent sessional engagement; provided that where the leave is not taken within 12 months of it accruing, or the employee is not re-engaged within eight weeks, the accrued entitlement will be paid out. See also clause 25—Annual leave.

(d)    Subject to the employee’s satisfactory conduct and performance, where an equivalent position will exist at the expiry of the employee’s period of engagement, the employer will offer a further engagement to the employee.

(e)    Where practicable, notice of re-engagement will be given at least two weeks prior to the expiry of the current engagement and the employee will give one week’s notice of acceptance to the employer.

10.6    Continuous service

This clause applies only to teaching staff members.

For the purposes of the NES:

(a)    One or more engagements of a casual or sessional employee with an employer will be deemed to be continuous unless more than eight weeks have elapsed between those engagements. The period between engagements will not count as service.

(b)    Service will be deemed to be continuous notwithstanding that it has been broken if the interruption was caused by the employer with the intention of avoiding an obligation under this award, another industrial instrument or relevant legislation.

10.7    Letter of appointment

On appointment an employer will provide an employee (other than a casual employee) with a letter of appointment stating their classification, rate of pay and mode of appointment. In the case of a sessional teacher this will also state the cessation date of the employment.

48    It is not necessary to further consider sessional employment, or the arrangements for accrued continuous service for teaching staff members in cl 10.6. If the applicants are covered by the award it will be as tutor/instructor.

49    In my view, part-time employment may be excluded because the terms of cl 10.3(b) were not satisfied.

50    The assessment to be made, therefore, if the award applied, is whether the employment of the applicants was full-time or casual.

51    The working hours of full-time tutor/instructors are stated in cl 21.3:

21.    Ordinary hours of work

…

21.3    Ordinary hours of work—teachers and tutor/instructors

(a)    For the purposes of the NES, the ordinary hours of work are 38 per week.

(b)    The employer will be entitled to annualise the hours of work in such a manner that they are averaged over 12 months, or where the contract of employment is for less than a calendar year, for the period of employment.

(c)    For the purpose of determining the number of hours worked by a teacher or tutor/instructor the following will apply:

(i)    each contact hour of teaching delivery by a teacher will count as 1.5 hours of work, including administration, assessment and consultation; and

(ii)    each contact hour of delivery by a tutor/instructor will count as 1.25 hours of work, including administration, assessment and consultation.

52    Those provisions provide little assistance for the purpose of cl 10.2, except to make the contrast with cl 10.4(a). On the evidence before me, I would conclude that the applicants’ arrangements fall within cl 10.4(a) and that cl 10.4(c) also applied and appears to have been satisfied, with the result (if the award applied) that the applicants were casual employees for award purposes.

53    Clause 14.5 (which is referred to in cl 10.4(b)), provides:

14.    Minimum wages

…

14.5    Casual rates—teachers, tutor/instructors and general staff

(a)    A teacher and a tutor/instructor will be paid a daily rate except where the engagement is for less than five hours when payment will be at the hourly rate. Where an hourly rate is paid, it will be payable for each hour of attendance other than for timetabled tea breaks (in respect of which no more than 15 minutes will be deducted) and timetabled lunch breaks.

(b)    Other than as specified above, casual rates for staff will be calculated as follows:

54    It would be a matter of calculation whether the rates of pay met those provisions (and those in cl 14.3 where the rates of pay, on an annualised basis, are stated) but otherwise clause 14.5(a) also appears applicable.

55    Importantly, except for some machinery matters, on questions of entitlement to various forms of leave the award defers to the NES (see cll 25.1, 26, 27, 28.1, 29.1).

56    Casual employees are excluded from (or restricted in) many forms of leave under the NES (see FW Act e.g. parental leave, s 67(2); annual leave, s 86; personal/carer’s leave (which includes sick leave and compassionate leave), s 95; jury service leave, s 111(1)).

57    For example, in the NES, s 86 of the FW Act (which commences Division 6—Annual leave) states:

86    Division applies to employees other than casual employees

This Division applies to employees, other than casual employees.

58    There is no definition of “casual employee” in the FW Act, although there is a definition of “long term casual employee” in s 12, which is relevant for entitlements to “flexible working arrangements” and parental leave arrangements (not issues in the present case). Understanding even that definition requires an understanding of the term “casual employee”.

59    Whether the award applies, or does not, the ultimate question, therefore, remains the same in the period after 1 January 2010. Were the applicants engaged and employed as casual employees in the usual connotation of that term?

60    It follows that, for the purposes of any entitlement claimed under the AFPCS, the NES or the award, the basic question is the same – were the applicants engaged as casual employees in the usual connotation of that term or, as they claimed, as permanent employees?

61    In Reed v Blue Line Cruises Limited (1996) 73 IR 420 (“Reed”), Moore J (sitting in the Industrial Relations Court of Australia) made some observations about the nature of casual employment to which I referred in Thompson v Big Bert Pty Ltd t/as Charles Hotel [2007] FCA 1978; (2007) 168 IR 309 at [57]. In Reed, Moore J was influenced against a conclusion of casual employment by the apparent regularity and eventual overall period of Mr Reed’s engagement. However, his Honour stressed that he was assigning a meaning to the notion of casual employment for the purpose of the Convention concerning Termination of Employment at the Initiative of the Employer, which was a meaning different, probably, from the meaning for the purpose of award coverage.

62    It is clear that his Honour accepted that the appropriate characterisation of the nature of employment is one which must be determined by reference to what is known at the commencement of the engagement. It must be accepted that, over time, repetition of a particular working arrangement may become so predictable and expected that, at some point, it may be possible to say that what began as discrete and separate periods of employment has become, upon the tacit understanding of the parties, a regular ongoing engagement (for an example of historical interest, see Cameron v Durning [1959] AR (NSW) 142). On the other hand, retention of the same initial arrangements (month-to-month rostering, imprecision of days and hours, timesheets recording actual hours, absences or unavailability at the discretion of the employee) may indicate that the parties have chosen to perpetuate those initial arrangements – i.e. casual engagement with an entitlement to pay arising as and when work is actually performed.

63    In my view, in the present case the second approach is the one which the evidence as a whole suggests. Even though the initial arrangements came to be repeated for many years, I see nothing to indicate that the parties agreed to change the specified nature of the engagement or that there was any later mutual intent that the engagement should be other than casual, as was clearly stated in each initial contract. The parties themselves have conducted the case on the basis that such a change did not occur.

64    Doing the best I can with the evidence before me I am not satisfied that either of the applicants was ever engaged otherwise than as a casual employee. This is a matter where they bore the onus, and they have not discharged it.

65    The things most in favour of their contentions of permanent employment are the length, general regularity and frequent weekly hours of their engagements. However, it is clear that the engagements were otherwise not fixed, not certain and were variable. Hours of work depended on agreed rosters and payment was based upon the submission of specific timesheets. Payments were earned, calculated and paid on an hourly basis. Both parties to the contracts conducted themselves on the footing that absences (for any reason) were not paid. The significance of that circumstance is that the absence was not treated as an absence from work. Leave was not required and could not be withheld.

66    I therefore conclude that none of the AFPCS under the WR Act, the NES under the FW Act or the award provided any entitlement which may be vindicated in the present proceedings.

67    The remaining question concerns the possible application of the Annual Holidays Act. Section 3(1) provides:

3    Annual holidays with pay

(1)    Except as otherwise provided in this Act, every worker shall at the end of each year of the worker’s employment by an employer become entitled to an annual holiday on ordinary pay.

Such annual holiday shall:

(a)    where any such year of employment ends upon or before 30 November 1974, be of three weeks,

(b)    where any such year of employment ends after 30 November 1974, be of four weeks.

68    In the case of periods of employment for less than a year, s 4(3)(a) and (b)(ii) have the effect that a payment of 1/12th of ordinary pay is due on account of untaken annual leave.

69    It has been held that the Annual Holidays Act applies to casual employment, although where a casual loading has been paid (such as the award provides, for example, in cl 14.5) it has been held that the payment of the casual loading will satisfy the requirement to pay for untaken annual leave at the end of each casual engagement (see In re Private Hospital Nurses (State) Award [1962] AR (NSW) 446).

70    If the award applied, and was complied with, there can be no question of any additional entitlement to payment for untaken annual leave for each period of casual employment after 1 January 2010. Before 1 January 2010 (and generally if the award does not apply) the question is whether there is an amount in the casual rate of pay which can be said to be on account of matters such as a lack of entitlement to annual leave. The initial letter of engagement expressly states that the rate of pay is inclusive of any amount for annual leave. As this is the basis upon which the parties contracted, in my view no separate or additional entitlement arises under the Annual Holidays Act.

71    However the matter is approached, and whether the award applies or not, there is therefore no entitlement which arises under the Annual Holidays Act.

72    Ultimately, it is not necessary to determine whether the award applies to decide the particular question in the present case. As no other party with a particular interest in the scope and application of the award has been heard, I would prefer not to express unnecessary views about its application.

73    I am satisfied that, whether for the purpose of the award or more generally, the applicants were each engaged, with their understanding and consent, as casual employees in a series of engagements on a daily (or perhaps sometimes hourly) basis. None of their claims for relief succeed and each must be dismissed. I will so order.

Associate:

Dated:    6 June 2016