Period of employment definition

31 December 2019 

Calculating an employee’s period of employment is important if you are responding to an employee's application for an unfair dismissal remedy.

As you will see below, the definition is not so so straight forward so here's a guide. 

In a hurry? Jump ahead. 

First, we'll start with the period of employment definition in the Fair Work Act.

Section 384 Fair Work Act - period of employment

Below I have underlined the important parts of the definition which we'll break down after.

FAIR WORK ACT 2009 - SECT 384

Period of employment

(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.

(2)  However:

(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; and

(b)  if:

(i)  the employee is a transferring employee in relation to a transfer of business from an old employer to a new employer; and

(ii)  the old employer and the new employer are not associated entities when the employee becomes employed by the new employer; and

(iii)  the new employer informed the employee in writing before the new employment started that a period of service with the old employer would not be recognised;

the period of service with the old employer does not count towards the employee's period of employment with the new employer.

Below is a break down the definition so you'll know how Fair Work calculates an employee minimum work period. 

Continuous service

Continuous service is a period of unbroken service that an employee is employed, not counting exclusions for certain types of unpaid leave and certain types of unpaid authorised absence. 

Regular and systematic 

What is employment on a regular and systematic basis? 

It has to do with the employment and not the employee's hours worked.

So, what helps to prove regular and systematic employment?

A clear pattern or roster of hours is strong evidence. 

Also, the term ‘regular’ implies a repetitive pattern and does not mean frequent, often, uniform or constant.

The term ‘systematic’ requires that the engagement be ‘something that could fairly be called a system, method or plan’.

Where there is no clear pattern or roster, evidence of regular and systematic employment can be established where:

  • the employer offered suitable work when available at times that the employee could work, and
  • work was offered and accepted regularly, not occasionally or irregularly. 

Reasonable expectation of continuing employment

What is a reasonable expectation of continuing employment?

The Fair Work Act does not define this term, it depends on certain circumstances. 

One test that has been applied is if during a period of at least six months before a dismissal, the employee had a reasonable expectation of continuing employment on a regular and systematic basis.

Transfer of employment

An employee's service with one employer (first or old employer) will count as service with another employer (second or new employer) if two conditions are met:

  • the second employer is an associated entity of the first employer, and
  • an employee becomes employed by the second employer within 3 months of their employment being terminated by the first employer.

If these 2 conditions are not met, then the period of service with the first employer will not be counted towards service with the second employer.

Excluded period

Below are examples of when continuous service will be excluded: 

  • resignation 
  • dismissal 
  • transfers of employment that don’t meet the transfer of employment definition in section 22(7) of the Fair Work Act. 

An excluded period does not break an employee’s continuous service with their employer. 

But, it does not count towards the length of the employee’s continuous service. 

Periods of casual employment may affect the length of an employee’s continuous service for an application for an unfair dismissal remedy.

The following are periods that are excluded from the definition of ‘service’ and therefore for calculating the minimum employment period:

• any period of unauthorised absence, and

• certain periods of unpaid leave or unpaid authorised absence (community service leave, certain stand downs and prescribed leave or absences are exceptions).

Unauthorised absence

The following are examples of unauthorised absence:

• periods of industrial action engaged in by employees, and

• other absence from work contrary to employer directions.

Unpaid authorised absence

The following are examples of unpaid authorised absence:

• unpaid parental leave, and

• unpaid personal/carer’s leave.

The above periods do not break service however they are not counted in the calculation of the minimum period of employment.

Unpaid personal leave not counted

Wales v 3 Point Motors Pty Ltd T/A 3 Point Motors [2012] FWA 3817 (Jones C, 22 May 2012).

An employee worked for exactly 6 months and had part of 1 days' sick leave without pay. With that period of leave deducted the employee had not met the minimum period of employment.

Injury covered by private insurer is unpaid leave not counted

L.M. v Standard & Poor’s (Australia) Pty Ltd [2012] FWA 9634 (Roe C, 12 November 2012).

The employee's absence for 5 weeks due to illness was paid for by the employee's income protection insurance. Because the employer was not legally obligated to provide income protection insurance, the employee was on unpaid leave. 

Absences that count towards the minimum employment period

What is included in the minimum period of employment?

The following are examples of unpaid authorised absence that are counted as service towards the minimum period of employment:

• community service leave (e.g. jury service), and

• certain stand downs.

Injury covered by private insurer is unpaid leave & not counted

Workpac Pty Ltd v Bambach [2012] FWAFB 3206 (Ross J, Sams DP, Booth C, 31 May 2012).

An employee's absence while on workers compensation (paid by an insurer on behalf of the employee) was not an unpaid authorised absence and not an excluded period.

Bringing it all together

Check the definition for a period of employment, 

As always, be sure to get advice if you are in doubt.

Do you have questions or comments about an employee's period of employment? Be sure to leave them below. 


​​



Vivian Michael
 

Vivian Michael is a lawyer and founder of Michael Law Group. Vivian's mission is to deliver the best quality business legal services to entrepreneurs launching an Australian business, wherever they are in the globe.

Click Here to Leave a Comment Below 0 comments

Leave a Reply: