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ARTICLE · 24 AUGUST 2016

Shock decision: casual service recognised in redundancy pay

The FWC decided that employers must recognise regular and systematic casual employment when calculating redundancy pay.

AustraliaEmployment and HR

A few things in life are certain. The sky is blue, puppies are adorable, and casual employees don't get redundancy pay. Maybe you weren't fully across that last one but, in our world, it's a given. Until now.

In a recent (and, in our view, wrong) decision, the majority of the Full Bench of the Fair Work Commission decided that, when calculating redundancy pay, employers must recognise employees' regular and systematic casual employment.

The Fair Work Act excludes casual employees from redundancy pay. Nothing in the Full Bench's decision changes that. However, in this case, the employees in question transitioned from casual to permanent employment. Therefore, when redundancies were rolled out, they had an entitlement to redundancy pay. In calculating redundancy pay, their employer naturally took the casual exclusion to mean casual service doesn't count. Makes sense, except to the majority of the Full Bench.

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