Fair Work Act 2009

s.604 - Appeal of decision

Construction, Forestry, Mining and Energy Union

Appeal - meaning of "casual employee" in the National Employment Standards.

[1] This is an application by Telum Civil (Qld) Pty Limited (Telum) for permission to appeal and, if permission is granted, an appeal against a decision of Commissioner Booth ( [2012] FWA 10684) on an application pursuant to s.739 of the Fair Work Act 2009 (FW Act) for FWA to resolve a dispute raised under the dispute settlement procedure in the Telum Civil (QLD) Pty Limited ABN 98 134 691 482 Section 329 Union Greenfields Agreement Contract Labour Hire -Civil Works February 2009 (Agreement), an enterprise agreement made under the Workplace Relations Act 1996.

[2] Telum operates a construction business. It appears that at the time the Agreement was made Telum was respondent to the National Building and Construction Industry Award 2000, a pre-reform Federal award. From 1 July 2009 Telum was covered by the Building and Construction General On-site Award 2010 (Construction Modern Award) albeit that the Agreement prevailed over the Award.

[3] The dispute relates to a group of Telum's employees who had worked on the 'Origin Alliance Project' whose employment had come to an end because the project was complete and the employees were no longer required. The CFMEU contended on behalf of the employees that they were entitled redundancy payments under the National Employment Standards (NES). The group of employees in question (the Employees) had been regarded by Telum as casual employees and paid a casual loading.

[4] Division 11 of the NES deals with notice of termination and redundancy pay. Section 123(1)(c) provides that Division 11 does not apply to a casual employee:

(1) This Division does not apply to any of the following employees:

[5] Telum refused to make redundancy payments the basis that the Employees were casual employees.

[6] Conciliation of the dispute was unsuccessful and the Commissioner conducted an arbitration that the parties agreed would be determined by reference to the following "Questions for arbitration... determined at a Directions Hearing on 19 October 2012" ( [2012] FWA 10684 at [9]):

1 Whether employees whose "status of employment" under clause 3.3 of the [Agreement], who are employed as casual employees and have been employed for more than 12 months are entitled to a redundancy payment or [are] such payments excluded under s.123 of the Fair Work Act 2009?

2 If the answer is that employees are not excluded, what [are] the criteria for inclusion for redundancy payment?

[7] The Commissioner noted that "[t]he parties agreed that the matter could be decided on the papers with the need for a hearing."

[8] Clause 2 of the Agreement relevantly provides:

This Agreement covers all of the terms and conditions of employment and shall operate to the exclusion of any and all other industrial agreements, notional agreements or awards.

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

At the time of their engagement, the Telum will inform each employee of the terms of their engagement and, in particular, whether they are to be a permanent employee or casual employee.

Casual employees will be engaged by the hour. A person engaged as a casual will be paid a loading of 25% on the permanent employee ordinarily time wage rates prescribed in clause 6 of this Agreement. The casual loading will be paid in lieu of and compensate for all benefits such as leave, notice, redundancy and any other full-time entitlements that do not apply to casual employees." (underline emphasis added)

[10] Clause 3.4 obliged Telum to give "a permanent employee" notice of termination as prescribed in that clause and states:

The employment of a casual employee may be terminated by 1 hour's notice or payment or forfeiture in lieu thereof by either party. Superannuation shall be paid on a pro rata basis.

[11] Clause 3.9 conferred a redundancy benefit on "each permanent employee".

[12] It appears not to have been in dispute that Telum had recorded all of the Employees in its books as casual employees and had paid them a casual loading, recorded as such on their pay slips. It is more than tolerably clear from the Commissioner's reasons for decision that the case had proceeded before the Commissioner on an assumption that the Employees had been expressly engaged as casuals at the time of their employment, had been paid as casuals throughout their employment and had otherwise been treated as casuals by Telum (see especially [2012] FWA 10684 at [54]).

[13] Indeed, the initiating application filed by the CFMEU proceeded on a premise that the Employees were casual employees. On its face, the initiating application contended that the Employees were entitled to redundancy payments in accordance with the NES because they were "long term casual employees".

[14] The Commissioner correctly concluded that the entitlement or otherwise of the Employees to redundancy payments under s.119 of the NES turned on whether the Employees were "casual" or not within the meaning of s.123(1)(c). ( [2012] FWA 10684 at para [14]).

[15] The CFMEU fundamentally altered its contentions during the course of the matter. The Commissioner noted that "[t]he CFMEU in its application submitted that the employees were long term casual employees as defined in the Act and therefore entitled to redundancy. In later submissions, it argued that the employees were not casual, regardless of the label used or the forms surrounding their employment". The Commissioner continued:

[27] It is not entirely clear what the CFMEU intended by its use of the term "long term casual employee".

[29] If the CFMEU's argument is that its named members are entitled to redundancy because they are long term casual employees, it is misconceived. However as I understand the application it is that the employees are entitled because of their patterns, hours and expectation of work, and because they have been so employed for longer than 12 months. This interpretation is fortified by the submissions later made by the CFMEU which did not rely on the long term casual argument.

[16] The Commissioner had noted the following submissions from the CFMEU that she accepted as uncontested ( [2012] FWA 10684 at [17])

9. The Employees were engaged for full-time equivalent hours.

10. The hours worked by the Employees were regular and not subject to variations of any kind. The Employees worked regular, consistent start and finish times.

11. The Employees attended work at the same time each working day without specific direction as there was an expectation that they would do so.

[17] The Commissioner considered a number of authorities on what constitutes casual employment under the general (common) law. The case advanced by the CFMEU, and accepted by the Commissioner, was that the expression "casual employee" in s.123(1)(c) should be given a meaning consistent with the general law.

[18] The Commissioner's conclusions are captured in the following extract ( [2012] FWA 10684 at para [50] ff):

[50] Understanding whether the employees are casual or not requires the Tribunal to read the Agreement and the Act together in the context of the general law. Industrial instruments are often imprecise and Court decisions cannot be read as if they were statutes. So it is here, where the Tribunal is called on to arbitrate on the true employment status of employees based on the Agreement, the Act, the common law and the facts of the case.

[53] The uncontested submissions before the Tribunal, stated at paragraph [16] (sic - [17]) above point to the employees not being casual employees as a matter of the facts submitted to the Tribunal and consistent with the authorities referred to above.

[54] The description of the employees as casual under the agreement and at the time of engagement is clearly not, despite Telum's submissions, determinative of the employment status as a matter of fact.

[55] Based on the factors mentioned in the cases discussed above and the uncontested factors asserted by the CFMEU, a proper characterisation of the CFMEU's members that are the subject of this application is that their employment status is not casual. This conclusion is because of the following:

• the regular and consistent start and finish times; and

[56] It is important to note that these factors have been asserted by the CFMEU, but not proven in each individual case. Indeed the question for arbitration before the Tribunal was not about the entitlements of each named individual but whether the former employees were eligible for redundancy under the Act or not.

[57] The employees are not excluded by s.123(1)(c) of the Act because, depending on the facts in each case, they were not in fact casual employees.

[58] It follows that the answers to the questions for adjudication are:

1. The employees are entitled to redundancy payments, subject to ascertaining the facts in each case; and

2. The criteria for inclusion are the facts in each case based on assessment by reference to the factors listed in paragraph (b) below.

[59] It is for the parties to ascertain individually, based on the normal criteria for redundancy payments under the Agreement, the Act, and the general law what the entitlement is for each of the individuals named in the application.

[60] Should there be dispute about individual eligibility and entitlement, that is a matter for the Fair Work Ombudsman.

(a) individuals named in the application be excluded from the scope of this order if the individual:

ii. had not completed 12 months employment with Telum at the time of termination;

iii. was terminated other than at Telum's initiative (eg, the individual resigned or retired);

(b) the remaining named individuals are eligible for redundancy if they meet the following criteria:

i. a regular pattern of hours or full time employment;

ii. an on-going employment relationship as opposed to an episodic one;

iii. work patterns were chosen by the employer, and the employee generally was not able to elect whether to work or not when work was offered;

iv. the employer generally required notice from the employee prior to the employee being absent or on leave.

[19] The case before the Commissioner turned on the meaning of the expression "casual employee" in s.123(1)(c) on its proper construction.

[20] The Commissioner did not expressly address the proper construction of s.123(1)(c) but, rather, proceeded on an assumption the expression "casual employee" in s.123(1)(c) referred to the notion of casual employment under the general (common) law. For the reasons that follow, that assumption was affected by error.

[21] We do not propose to set out a detailed summary of the state of the general law on what constitutes casual employment. A useful conspectus of the authorities was provided by Boland P in Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Department of Justice and Attorney General (Corrective Services NSW) [2010] NSWIRComm 148. It is sufficient to note for present purposes that the notion of casual employment remains "ill-defined" under the general law and calls for the application of criteria that do not deliver a clear and unambiguous answer in many cases but, rather, lead to results on which reasonable minds may differ.

[22] The language of s.123(1)(c), like any other provision, must be construed in the context of the FW Act as a whole and with the purposive approach mandated by s.15AA of the Acts Interpretation Act 2001. There is no rule of construction that dictates that an expression such as "casual employee" must have its general law meaning.

[23] The FW Act did not commence in a vacuum. It replaced the WR Act and inherited a Federal award system and an award modernisation process that was undertaken in anticipation of the central place of modern awards in the FW Act system.

[24] There is a long history of regulation of casual employment in Federal awards - including grappling with the issues arising from the nature of casual employment, the increasing casualisation of the workforce and problems associated with employees who are labelled and paid as casuals notwithstanding that they have a regular and ongoing pattern of engagement indistinguishable from 'permanent' full time or part-time employees. That history is set out at length in the decision of the Full Bench of the AIRC in Re Metal, Engineering and Associated Industries Award 1998 (2000) 110 IR 247 (Munro J, Polities SDP and Lawson C; 29 December 2000) (Metals Casuals Case) and we will not repeat it here. That careful decision is of particular importance and repays close study. The Metal, Engineering and Associated Industries Award 1998 (pre-reform Metals Award) was the centrepiece of the Federal award system in the decades prior to the award modernisation process. The Full Bench was dealing with an application by the AMWU to vary the provisions relating to casual employment in pre-reform Metals Award to restrict casual employment under the pre-reform Metals Award to what have been described as "true" casuals (employees who work under arrangements characterised by 'informality, uncertainty and irregularity' - (2000) 110 IR 247 at para [109]) and to increase the casual loading.

[25] The Metals Casuals Case demonstrates how and why the specification of casual employment in Federal awards had diverged from the (ill-defined) general law position to a position where, by the time of award modernisation process, for many, if not most, Federal awards, an employee was a casual employee if they were engaged as a casual (that is, identified as casual at the time of engagement, perhaps with a requirement of a writing) and paid a casual loading. The Full Bench recognised that this approach had led to a position where employees with regular and systematic hours on an ongoing basis could still be "casual employees" under a Federal award.

[26] The objects of the FW Act are specified in s.3. Of particular relevance are the following:

The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by:

(a) providing workplace relations laws that are fair to working Australians, are flexible for businesses, promote productivity and economic growth for Australia's future economic prosperity and take into account Australia's international labour obligations; and

(b) ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders; and

(f) achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action; ... (underline emphasis added)

[27] Chapter 2 of the FW Act deals with terms and conditions of employment of national system employees. Section 41 notes:

The main terms and conditions come from the National Employment Standards, modern awards, enterprise agreements and workplace determinations.

The National Employment Standards (Part 2-2) are minimum terms and conditions that apply to all national system employees.

A modern award (see Part 2-3), an enterprise agreement (see Part 2-4) or a workplace determination (see Part 2-5) provides terms and conditions for those national system employees to whom the award, agreement or determination applies. ... (underline emphasis added)

[28] Section 59 of the FW Act provides a guide to the National Employment Standards in Part 2-2 and underscores the interrelationship between the NES and modern awards and enterprise agreements:

The National Employment Standards are minimum standards that apply to the employment of national system employees. Part 2-1 (which deals with the core provisions for this Chapter) contains the obligation for employers to comply with the National Employment Standards (see section 44).

The National Employment Standards also underpin what can be included in modern awards and enterprise agreements. Part 2-1 provides that the National Employment Standards cannot be excluded by modern awards or enterprise agreements, and contains other provisions about the interaction between the National Employment Standards and modern awards or enterprise agreements (see sections 55 and 56). (underline emphasis added)

"...provides for the FWC (constituted by the Minimum Wage Panel) to set and vary minimum wages for national system employees. For employees covered by modern awards, minimum wages are specified in the modern award. For award/agreement free employees, minimum wages are specified in the national minimum wage order.

[30] Section 282 also notes that Div 4 of Part 2-2 "provides for national minimum wage orders and requires employers to comply with them" and that such orders "also set the casual loading for award/agreement free employees". (See s.282(2) and (4), s.295(1)(b) and (2)(c) and s.295(1)(b)).

[31] It may be noted that the FW Act draws a distinction between the coverage of a modern award and the application of that modern award (as did Part 10A of the WR Act). Section 57 of the FW Act provides that a modern award does not apply to an employee (or to an employer, or an employee organisation, in relation to the employee) in relation to particular employment at a time when an enterprise agreement applies to the employee in relation to that employment. Transitional provisions achieved the same effect in relation to certified agreements and, later, workplace agreements made under the WR Act that continued in operation after the commencement of the FW Act - see Part 2 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) and s.170LY and, after the WorkChoices amendments, s.349 of the WR Act).

[32] If a modern award covers an employer and its employees, that modern award becomes the primary reference instrument against which an enterprise agreement is assessed for the purposes of the better off overall test in s.193. A proper application of that test should ensure that 'casual' employees under an enterprise agreement are better off overall when compared to their entitlements under the applicable modern award.

[33] Part 10A of the Workplace Relations Act 1996 (WR Act) made provision for an award modernisation process and the making of modern awards by the Australian Industrial Relations Commission (AIRC). Section 576J specified the matters about which terms could be included in a modern award. Section 576J(1)(b) of the WR Act authorised the inclusion of terms about:

(b) type of employment, such as full time employment, casual employment, regular part time employment and shift work, and the facilitation of flexible working arrangements, particularly for employees with family responsibilities; (underline emphasis added)

[34] The FW Act, in Part 2-3, makes continuing provision for that system of modern awards and contains an authorisation in identical terms: s.139(1)(b) of the FW Act.

[35] As a result of the award modernisation process, the Full Bench of the AIRC made some 122 modern awards covering most of the economy that commenced to operate on 1 January 2010, including the Construction Modern Award. Roughly speaking, the areas of employment that remain award-free are only those areas that, historically, have been award-free.

[36] Section 59 and s.139(1)(b) of the FW Act demonstrate that the legislature contemplated that casual employment, as a type of employment, might be defined in modern awards as, indeed, it has been.

[37] The FWC has responsibility for maintaining the modern award system in accordance with the modern awards objective in s.134 which specifies that "[t]he FWC must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account" a list of matters: see, generally, Part 2-3 of the FW Act.

[38] All of the modern awards contain a definition of casual employment. Those definitions, notwithstanding some variation in wording, have the same core criteria:

(i) That the employee was "engaged" as a casual - that is, the label of "casual" is applied at the time of time of engagement; and

(ii) That the employee is paid as a casual, and specifically, the employee is paid a casual loading (set at 25% in all of the modern awards, subject to transitional arrangements), which loading is paid as compensation for a range of entitlements that are provided to permanent employees but not to casual employees.

[39] For example, clause 14.1 of the Manufacturing and Associated Industries and Occupations Award 2010 provides:

14.1 A casual employee is one engaged and paid as such. A casual employee for working ordinary time must be paid an hourly rate calculated on the basis of one thirty-eighth of the minimum weekly wage prescribed in clause 24.1(a) for the work being performed plus a casual loading of 25%. The loading constitutes part of the casual employee's all purpose rate.

[40] That award excludes casual employees from the entitlement to annual leave, personal leave and the other entitlements for which the casual loading compensates.

[41] Clause 14 of the Construction Modern Award relevantly provides:

14.1 A casual employee is one engaged and paid in accordance with the provisions of this clause.

14.2 A casual employee is entitled to all of the applicable rates and conditions of employment prescribed by this award except annual leave, paid personal/carer's leave, paid community service leave, notice of termination and redundancy benefits.

14.3 An employer, when engaging a person for casual employment, must inform the employee, in writing, that the employee is to be employed as a casual, stating by whom the employee is employed, the job to be performed, the classification level, the actual or likely number of hours to be worked, and the relevant rate of pay.

14.5 A casual employee must be paid a casual loading of 25% for ordinary hours as provided for in this award. The casual loading is paid as compensation for annual leave, personal/carer's leave, community service leave, notice of termination and redundancy benefits and public holidays not worked.

[42] Again, this approach to the identification of casual employees was not an innovation in the modern awards. Many, if not most, of the pre-reform awards, and certainly the main pre-reform awards, adopted this approach.

[43] None of the modern awards adopt the general law approach to the identification of casual employees. Indeed, a number of modern awards contain 'casual conversion' provisions (typically where casual conversion was a feature of the key Federal awards and or NAPSAs replaced by the modern award) that allow for an employee who is engaged and paid as a casual, but who works systematic and regular hours for a sufficient period, to seek conversion to permanent full time or part time employment. For example, the Construction Modern Award contains such a provision, clause 14.8, which includes the following:

14.8 Casual conversion to full-time or part-time employment

(a) A casual employee, other than an irregular casual employee, who has been engaged by a particular employer for a sequence of periods of employment under this award during a period of six months, thereafter has the right to elect to have their contract of employment converted to full-time or part-time employment if the employment is to continue beyond the conversion process.

(b) For the purposes of clause 14.8(a), an irregular casual employee is one who has been engaged to perform work on an occasional or non-systematic or irregular basis.

(h) An employee who has worked on a full-time basis throughout the period of casual employment has the right to elect to convert their contract of employment to full-time employment and an employee who has worked on a part-time basis during the period of casual employment has the right to elect to convert their contract of employment to part-time employment, on the basis of the same number of hours and times of work as previously worked, unless other arrangements are agreed on between the employer and employee.

[44] Such 'casual conversion' provisions were not uncommon in pre-reform Federal award and presuppose that the general law approach to identifying casuals does not apply in the Federal award context and that a provision such as this is required if an employee who is engaged and paid as a casual is to be treated as anything other than a casual for the purposes of a modern award.

[45] The general approach to casual employment in the modern awards is a continuation of the approach explained and adopted in the Metals Casuals Case and underscored in Redundancy Case 2004 (PR032004).

[46] It will be noted that a range of NES entitlements do not apply to a "casual employee":

● parental leave and related entitlements (Div 5 - see s.67(2)),

● personal/carer's (sick) leave and compassionate leave (Div 7 - see s.86)

● notice of termination and redundancy pay (Div 10 - see s.123)

● public holidays (Div 10 - casual employees are not paid unless rostered on for the public holiday)

[47] These are all entitlements of permanent employees that are compensated for in the casual loading: compare Metals Casuals Case (2000) 110 IR 247 at [160]ff and Re Pastoral Industry Award 1998 (2003) 123 IR 184 at [76]ff and esp at [109]-[111].

[48] To adopt the construction of s.123(1)(c) adopted by the Commissioner would allow for double dipping by employees engaged as casuals and paid the casual loading, but who work regular and systematic hours, of the sort that the Full Bench in the Redundancy Case 2004 set its face against (PR032004 at [154]). It is unlikely that the legislature intended that outcome. It is an outcome that is inconsistent with the purpose and objects of the FW Act. It is an outcome that would tend to impede productivity and flexibility (cf s.3(a) and (f)) for the reasons explained by the Full Bench in the Metals Casuals Case.

[49] Other uses of the expression "casual employee" or the word "casual" in the FW Act support the conclusion that they refer to the characterisation of the employee under the applicable modern award or enterprise agreement.

[50] The FW Act defines the expression "long term casual employee' in s.12 to mean

long term casual employee: a national system employee of a national system employer is a long term casual employee at a particular time if, at that time:

(b) the employee has been employed by the employer on a regular and systematic basis for a sequence of periods of employment during a period of at least 12 months.

[51] This very definition suggests that legislature did not intend the expression "casual employee" to call up the general law approach. If the criterion in (b) is satisfied then the employee would likely not be a "casual employee" under the general law approach but the definition presupposes that an employee who satisfies the criterion in (b) can still be a "casual employee" within the meaning of (a).

[52] Moreover, that definition is used in only two places in the FW Act:

(i) in s.65(2)(b) in relation to the right to request flexible working arrangements to long term casual employees (casuals being otherwise excluded); and

[53] In each case, the definition is used to extend those rights to long term casual employees, being rights to which casual employees are otherwise expressly excluded.

[54] Section 23 specifies the meaning of the expression "small business employer" and relevantly provides:

(1) A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.

(2) For the purpose of calculating the number of employees employed by the employer at a particular time:

(a) subject to paragraph (b), all employees employed by the employer at that time are to be counted; and

(b) a casual employee is not to be counted unless, at that time, he or she has been employed by the employer on a regular and systematic basis.

[55] Again, the language presupposes that an employee can still be a casual employee even though he or she is employed on a regular and systematic basis.

[56] The FW Act makes special provision in relation casual employees accessing the unfair dismissal remedy. Relevantly for present purposes, an employee is not protected from unfair dismissal by the FW Act unless her or she has "has completed a period of employment with his or her employer of at least the minimum employment period" (s.382(a)). The minimum employment period is 6 months or 12 months depending upon whether the employer is a "small business employer" (s.383). The expression "period of employment" is defined in s.384 which relevantly provides:

(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.

(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; ...

[57] Again, the language of s.383(2)(a) presupposes that an employee employed on a regular and systematic basis with a reasonable expectation of continuing employment on a regular and systematic basis can still be a "casual employee". A conclusion at odds with the general law approach adopted by the Commissioner.

[58] In summary, the FW Act provides for the regulation of terms and conditions of employment of national system employees through an interrelated system of the National Employment Standards, modern awards, enterprise agreements (and, in some cases, workplace determinations or minimum wage orders). Having regard to the objects and purpose of the legislation, it is obvious that the legislature intended that those components should interact consistently and harmoniously. We conclude that on the proper construction of the FW Act the reference to "casual employee" in s.123(3)(c) and the rest of the NES - and, indeed, elsewhere in the FW Act - is a reference to an employee who is a casual employee for the purposes of the Federal industrial instrument that applies to the employee, according to the hierarchy laid down in the FW Act (and, if applicable, the Transitional Act). That is, the legislature intended that a "casual employee" for the purposes of the NES would be consistent with the categorisation of an employee as a "casual employee" under an enterprise agreement made under Part 2-4 of the FW Act (or under an "agreement based transitional instrument" such as a workplace agreement or certified agreement made under the WR Act) that applies to the employee or, if no such agreement applies, then consistent with the categorisation of an employee as a "casual employee" within the modern award that applies to the employee. Subject to any terms to the contrary, a reference to a "causal employee" in an enterprise agreement (or agreement based transitional instrument) will have a meaning consistent with the meaning in the underpinning modern award (or pre-reform award/NAPSA).

[59] The CFMEU placed particular reliance on the decision of Barker J in Williams v MacMahon Mining Services Pty Ltd [2010] FCA 1321; (2010) 201 IR 123. That case was relevantly concerned with the meaning of "casual employee" in s.227 of the Workplace Relations Act 1996. Barker J noted (at [31]) that "[t]he parties accept that the WR Act does not define the expression "casual employee" and so the expression should be given its ordinary common law meaning." This case is concerned with a different statutory context and Barker J's decision does not assist in the proper construction of the expression "casual employee" in s.123(1)(c) of the FW Act.

[60] In the present case, the Employees were engaged as casuals under the Agreement. The Agreement was a workplace agreement made under the WR Act and continued to operate after 1 July 2009 as an "agreement based transitional instrument". It was underpinned by the pre-reform National Building and Construction Industry Award 2000. Clause 13 of that pre-reform award relevantly provided:

13.1.1 The following provisions shall apply to the Operator classifications contained in 18.1.2 and 19.3.1 of this award:

13.1.1(a) Except as to casual labour, employment shall be by the week. An employee to become entitled to payment on a weekly basis shall, except as provided by clause 33 - Personal leave of this award, perform such work as the management shall from time to time require on the days and during the hours usually worked by the class of employees affected.

13.1.1(b) Employment for the first two weeks of service shall be from day to day at the weekly rate fixed. Provided that any employee who has once served a probationary period of two weeks with any employer shall not be subject to be employed for a second probationary period with the same employer except when such re-engagement takes place at least one month after the termination of employment. Provided, further, that an employee shall be paid for any holiday or holidays which occur during any period the employee is employed on probation pursuant to this clause.

13.2.1 The following provisions shall apply to the Tradesperson and Labourer classifications contained in 18.1.2 and 19.3.2 of this award:

13.2.1(a) One day's notice of termination of employment shall be given on either side or one day's pay shall be paid or forfeited.

13.2.1(b) Subject to the termination provisions of clause 36 of this award notice given at or before the usual starting time of any ordinary working day shall be deemed to expire at the completion of that day's work.

13.2.1(c) A tradesperson shall be allowed one hour prior to termination to gather, clean, sharpen, pack and transport tools.

13.2.1(d) Nothing in this clause shall affect the right of an employer to dismiss an employee without notice for misconduct or refusing duty.

13.4.1 A casual employee is one engaged and paid in accordance with the provisions of this clause. A casual employee shall be entitled to all of the applicable rates and conditions of employment prescribed by this Award except annual leave, personal leave, parental leave, jury service, public holidays and redundancy.

13.4.2 An employer when engaging a person for casual employment must inform the employee in writing that the employee is to be employed as a casual, stating by whom the employee is employed, the job to be performed, the classification level, the actual or likely number of hours to be worked, and the relevant rate of pay.

13.4.3 A casual employee may be employed by a particular employer on a regular and systematic basis for any period not exceeding six weeks. If the employment is to continue on a regular and systematic basis beyond six weeks the employee must then be employed pursuant to clause 13.1 or 13.2 of this Award.

13.4.4 The provisions of 13.4.3 shall not apply to a casual employee who has been engaged by a particular employer to perform work on an occasional basis and whose work pattern is not regular and systematic.

[61] Clause 3.3 of the Agreement creates two categories of employee: "permanent employees" and "casual employees". Those expressions are not defined. However, under the Agreement only "permanent employees" are entitled to paid annual leave, personal leave, public holidays and to notice of termination and redundancy payments. The reference to "casual employee" should be construed in the context of the underpinning award as having a meaning consistent with clause 13.4.1 - that is, an employee engaged and paid as a casual under the Agreement. [The Agreement operated to the exclusion of that underpinning pre-reform award (clause 2). There is no scope for the operation of sub-clauses 13.4.3 and 13.4.4. The Agreement was not obliged to replicate those provisions. The Agreement was certified and thus had passed the 'no disadvantage test' in s.346D of the WR Act notwithstanding the non-replication of those casual conversion provisions.]

[62] The case proceeded before the Commissioner on the assumption that the Employees were engaged and paid as casual under the Agreement. It follows that, under the Agreement, the Employees were "casual employees" and were thus "casual employees" for the purposes of s.123(1)(c).

[63] We are satisfied that the Commissioner's decision is affected by error and that we should grant permission to appeal and do so. The appeal proceeds as a rehearing. On the rehearing, for the reasons we have given, we are satisfied that the Employees were "casual employees" within the meaning of s.123(1)(c) excluded them from the notice and redundancy entitlements in Division 11 of the NES.

[64] The appeal is allowed. The decision and "order" of the Commissioner are quashed. The initiating application of the CFMEU is dismissed.

Mr B Cross of Counsel with Mr N Noonan for the Appellant

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