Two recent decisions have provided some important guidance on the obligation for employers to include, or not include, casual employees in enterprise bargaining processes under the Fair Work Act 2009 (Act).1 These cases are of particular relevance to universities, given the widespread use of casual academic employment contracts (including sessional employees) in the tertiary education sector.

This is an important compliance issue: not getting it right means not getting your Enterprise Agreement approved.

Additionally, there can be an underlying tension between casual or ‘sessional’, academics and their permanent colleagues. This tension sometimes extends to enterprise bargaining, where sessional academics can feel disenfranchised and disengaged from the process, particularly given that the National Tertiary Education Union (NTEU) tends to focus the majority of its efforts and attention on the permanent academics.

In many cases, universities take the view that there is benefit in involving sessional academics in all stages of the bargaining process to ensure that no university employee feels marginalised. The Swinburne and McDermott cases demonstrate that there are some regulatory constraints in doing so and, if it is not handled correctly, there is a risk that the Fair Work Commission (FWC) will refuse to approve a proposed enterprise agreement which has the majority support of employees.

This highlights the importance of strategic planning before commencing enterprise bargaining.

Key takeaways for university employers

This issue is not just academic: it affects every stage of the bargaining process – from the pre-bargaining stage (eg, the provision of the notice of representational rights under s 173(1)) to the bargaining stage (eg, 7 day access period to the proposed agreement pursuant to s 180) and the ultimate approval of the agreement.

Given the regulatory constraints, a mistake at any stage of the process could lead to a successful challenge to the approval of the proposed enterprise agreement.

Set out below are some key takeaways from Swinburne and McDermott for university employers:

  • Sessional academics are eligible and entitled to vote on a proposed enterprise agreement if they are ‘employed at the time’ of the relevant vote. They are also entitled to participate in all other steps in the enterprise bargaining process, provided they are ‘employed at the time’ of the relevant step.
  • Whether a particular sessional academic is ‘employed at the time’ is a question of fact. It will largely depend on whether the vote is held during the academic year.
  • If the vote is not held during the academic year, you should consider the following questions in relation to each sessional academic:
    • Has the sessional academic indicated that they will not be available to teach in the ensuing academic year (for example, have they obtained other full-time employment)?
    • Has the university made the decision not to engage that academic for the ensuing academic year (even if that decision has not yet been communicated to the academic)?
  • If the answer to either of the above questions is ‘yes’, then the sessional academic is likely not ‘employed at the time’ and, therefore, should not be asked to vote on a proposed enterprise agreement.
  • Finally, as sessional academics are entitled to be involved in each stage of the bargaining process if they are ‘employed at the time’, the question of whether each sessional academic is ‘employed at the time’ may need to be assessed on multiple occasions during the enterprise bargaining process.

Actions to minimise the risk of a challenge

Notwithstanding the general principles above, there are steps that universities can take to reduce the risk of a successful NTEU challenge to the approval of a proposed enterprise agreement, while otherwise ensuring that sessional academics are not excluded or disenfranchised.

These steps may include:

  1. Carefully considering the timing of the vote – could it be held during a teaching period, rather than a break?
  2. Structuring casual employment contracts to clarify whether sessional academics are employed during breaks in their teaching engagements (for example, through the use of fixed term contracts).
  3. Issuing communications to casual staff as early as possible regarding whether they are likely to be re-engaged during the next academic year.
  4. Requesting sessional academics provide notice in writing by a particular date if they will no longer be available to engage in sessional work.

While these steps may increase the likelihood that sessional academics will be entitled to vote on a proposed enterprise agreement – or at least help to clarify the position and reduce the risk of the FWC declining to approve the agreement, it must be noted that these steps potentially bring their own risk. That is, they could potentially ‘convert’ these casual academics into permanent employees, at least for the purposes of unfair dismissal rights. The above steps should only be taken after a careful balancing of the associated risks, and with the benefit of legal advice.

There is a fine balance to be struck here and the consequences of getting it wrong are potentially harmful. The right solution will likely be a bespoke one which suits the university’s particular needs – promoting the kind of relationship it wants to have with sessional academics.

Why does this matter?

Each occasion that a casual employee works is viewed as a separate engagement, meaning that they are not legally ‘employed’ during any period of time in which they are not actually working.2 As the provisions in the Act that deal with the making and approval of enterprise agreements refer to individuals who are ‘employed at the time’,3 on a strict reading, this would mean that casuals would potentially be disenfranchised from the enterprise bargaining process (i.e. they would only be able to participate if the vote took place during a period in which they were actually engaged to teach). However, as we have seen in Swinburne and McDermott, it is not as simple as that.

Swinburne involved an enterprise agreement that was proposed to cover academic, general and executive staff employed by Swinburne University. In February 2014, after around a year of negotiations between the University and the NTEU, the University put out the proposed enterprise agreement to its staff for a vote in accordance with section 181 of the Act.

The University requested that around 3,000 staff vote on the proposed agreement; relevantly, this included every sessional academic staff member who had been engaged at any time in the 2013 academic year. Ultimately, 2,005 of these individuals elected to vote, of which a very slim majority (1,031) voted to approve the proposed agreement.

Based on this vote, the University sought to have the proposed agreement approved by the Fair Work Commission. The NTEU challenged the agreement on a number of bases, including that some of the individuals invited to vote on the agreement were not actually eligible to do so as they were not ‘employed at the time’ of the vote.

At first instance, the Full Bench of the Fair Work Commission (on referral from Deputy President Smith) dismissed the NTEU’s objection and approved the agreement. The NTEU commenced a further challenge in the Federal Court, seeking to overturn the Full Bench’s decision.

Full Federal Court Decision in Swinburne

The Full Federal Court (comprised of Jessup, Pagone and White JJ) upheld the NTEU’s challenge, finding that the Full Bench had erred in the statutory test it applied to the University’s application for approval of the proposed enterprise agreement.

Jessup J (with whom White J agreed) held that the words ‘at the time’ in section 181 narrowed the concept of ‘employee’ from the general meaning of the term in the Act, which usually includes an individual who is employed, or usually employed, by a national system employer. That is, to give this limitation any meaning, the employees who had been requested to vote must have actually been employed at the time of the vote, rather than just ‘usually’ employed.

Given that the vote was being held outside of the academic year (i.e. during a non-teaching period in which sessional academics would not normally be performing any work), by simply including every single sessional academic who had been employed at any stage during the previous year without consideration of whether any particular academic was to be reengaged, the University could not adequately satisfy the Commission that the majority of those who were employed by the University at the time when it made its s 181 application, and who cast a valid vote, approved the proposed agreement.

Pagone J (in his minority judgment) was prepared to give the term ‘employees’ a wider interpretation than Jessup and White JJ, instead focussing on whether the employer had made ‘reasonable and diligent’ factual inquiries in regards to whether each individual was employed, or usually employed, at the time of the vote. However, given that the University had not even undertaken this more limited factual inquiry, Pagone J similarly upheld the NTEU’s challenge.

McDermott: clarification of the position in Swinburne?

The factual circumstances in McDermott were significantly different to those in Swinburne. First, McDermott involved an enterprise agreement which would apply to workers in the offshore oil and gas industry engaged on the Ichthys gas project. Second, the relevant enterprise agreement was voted on solely by casual employees of McDermott Pty Ltd.

At first instance, Commissioner Lee had refused to approve the proposed agreement on the basis that the casual employees who voted on the agreement were not engaged in work or being paid at the relevant time. While the employees had signed their employment contracts, as McDermott was not actually performing any work on the Ichthys project at that time, these employees were not ‘employed at the time’ of the vote.

On appeal by McDermott, the Full Bench of the Commission overturned the first instance decision and approved the proposed agreement. In reaching its decision, the Full Bench clarified that Swinburne is not authority for the proposition that a casual employee is only ‘employed at the time’ they are rostered to work and are being paid, rather it merely confirms that those ‘employed at the time’ does not include those who are merely ‘usually employed’.4

In these circumstances, the employees were ‘employed at the time’ largely because:

  1. they had been hired specifically to work on the Ichthys project;
  2. although they were not performing any work at that stage, they had all worked on earlier ‘campaigns’ on the project with McDermott;
  3. they had completed paid training for the project; and
  4. none of the employees had resigned or been dismissed by McDermott, or indicated that they were not available for future work.

In our view, McDermott is probably consistent with Swinburne. Both of these cases confirm that casual employees are entitled to participate in the enterprise bargaining process, including by voting in relation to a proposed enterprise agreement, provided they are employed at the relevant time.

However, these cases also highlight the importance of employers turning their mind to each casual employee, at each relevant stage of the bargaining process, to determine whether that employee is ‘engaged at the time’.

This may not always be an easy judgment to make, and the consequences of getting it wrong could be significant. Given the tensions described above, this highlights the importance of developing a clear and considered strategy from the outset of the enterprise bargaining process.

Written by Anthony Longland, Partner, Anna Creegan, Senior Associate, and Giacomo Giorgi, Solicitor, Perth.


1 National Tertiary Education Industry Union v Swinburne University of Technology (2015) 232 FCR 246 (Swinburne); McDermott Australia Pty Ltd v Australian Workers' Union [2016] FWCFB 2222 (McDermott).

2 See Shortland v Smiths Snackfood Co Ltd [2010] FWAFB 5709 at [10].

3 i.e. see sections 172(2), 180(2), 181(1).

4 At [35].