In what is largely a victory for common sense, the High Court has overturned on appeal the Federal Court’s May 2020 decision in WorkPac v Rossato[1] that a worker employed as a casual and paid a casual loading was nevertheless entitled to non-casual employment entitlements.

Background

The 2020 Rossato decision followed a previous decision of the Full Federal Court (WorkPac v Skene[2]) which turned on similar facts.  In both cases, the employees concerned were labour hire workers employed under an enterprise agreement as casual employees.  The employees were rostered for up to 12 months in advance to carry out FIFO mining work.

In reliance on the advanced nature of rostering and an expectation that the employees would be available during FIFO periods, the employment was found to be regular, predictable and continuous and that there was a firm advanced commitment by the employer to ongoing employment.  On that basis, the employees were found not to be casuals and therefore, entitled to non-casual entitlements (such as paid annual leave, personal leave, compassionate leave, etc) in addition to the 25% casual loading they had enjoyed throughout their employment.

High Court decision – WorkPac v Rossato

In the decision handed down this week[3], the High Court unanimously agreed with the Federal Court’s approach in that casual employment requires the absence of a firm advance commitment to ongoing work.  However, the High Court found that this must be an enforceable commitment by and against both employer and employee as derived from the terms and conditions of employment at the time the contract was made.  This means that casual employees must be able to accept or reject work offered and the employer must have no ability to require, or obligation to provide, ongoing work.

In making this finding, the High Court agreed with submissions for WorkPac that the Fair Work Act contemplates casual work being carried out on both a long term and a regular and systematic basis.  Importantly, it found that a “mere expectation of continuing employment on a regular and systematic basis, however reasonable, is not a basis for distinguishing the employment of other employees from that of a casual employee.”  As this commitment was not contained in any of the 6 contracts entered into by Mr Rossato with WorkPac, the High Court confirmed his employment as casual.

Significance of this decision

As noted by Gageler J in his separate judgement, the significance of the Rossato decision is greatly reduced by the amendments to the Fair Work Act made earlier this year[4].  Those amendments were made after the commencement of the Rossato appeal case but prior to the decision being made.

The amendments introduced for the first time, a statutory definition of a “casual employee”; being a person who accepted an offer of employment made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work.  Importantly, subsequent conduct of the parties (other than the appointment to full-time or part-time employment) will not alter the casual nature of the employment as agreed at the time of the offer.  Also important is that in considering whether a firm advance commitment to continuing and indefinite work according to an agreed pattern of work has been made by the employer, regard may only be had to:

  • the obligation of the employer to offer, or the employee to accept or reject, work;
  • whether the employee will work as required according to the needs of the employer;
  • whether the employment is described as casual employment;
  • whether the employee will be entitled to a casual loading or a specific rate of pay for casual employees.

What should employers do now?

Given the reliance on the terms of the employment contract in both the Rossato decision and the amendments to the Fair Work Act, we strongly recommend that employers of casuals take immediate steps to have their employment contracts reviewed.  Employers who do not have (or do not have properly drafted) written employment contracts will remain exposed to claims for back-payment of non-casual entitlements.

Although not directly related to the Rossato decision, it is also important for employers to note that the Fair Work Act amendments also introduced a right for certain casual employees to request conversion to full-time or part-time work.  Please let us know if you would like further information about that.

[1] WorkPac Pty Ltd v Rossato (2020) 278 FCR 179

[2] [2018] FCAFC 131

[3] WorkPac Pty Ltd v Rossato [2021] HCA 23

[4] Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021

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