5 August 2021
High Court upholds contractual characterisation of casual employee
WorkPac Pty Ltd v Rossato  HCA 23 (4 August 2021)
The High Court has overturned a decision of the Full Court of the Federal Court and has upheld the contractual characterisation of an employee as a casual. The High Court decision will have no ramifications for most Commonwealth employers.
Background: when is a casual employee not a casual employee?
The High Court was required to decide whether or not Mr Rossato, who had been employed by WorkPac as a casual employee, was in fact a casual employee for the purposes of the Fair Work Act 2009 (FW Act) and the applicable enterprise agreement. If Mr Rossato was not a casual employee, then he was entitled to be paid for annual leave, public holidays, personal leave and compassionate leave, despite having been paid a casual loading ostensibly in lieu of these entitlements.
The Full Court of the Federal Court decided that Mr Rossato was not a casual employee, having examined the totality of the employment relationship to determine whether there was a firm advance commitment to an agreed pattern of work. For example, the Full Federal Court took into account the shift rosters under which Mr Rossato worked, which were set for a whole year at a time. WorkPac appealed this decision to the High Court and argued that whether or not there was a firm advance commitment was to be determined at the time the parties entered into the employment contract, and by reference solely to the express terms of the contract. Those terms stated that Mr Rossato was a casual employee.
High Court finds the contract determines whether or not an employee is a casual
The High Court overturned the Full Federal Court’s decision and found that Mr Rossato was a casual employee who was not entitled to those forms of leave or to public holiday pay. The High Court re-affirmed that a casual employee is an employee who has no firm advance commitment as to the duration of employment or the days/hours of work. However, the High Court held that whether or not this firm advance commitment exists is to be determined by the enforceable terms of the employment contract – it is not to be determined by the parties’ unenforceable expectations or understandings, or by the parties’ conduct. The High Court held that the Full Federal Court had wrongly decided to the contrary in the related case of WorkPac Pty Ltd v Skene (2018) 264 FCR 536.
The High Court relied on various sections of the FW Act which envisaged that a person could be a casual employee and have a reasonable expectation of continuing employment on a regular and systematic basis – that is, those concepts were not inconsistent or mutually exclusive.
The High Court examined the terms and conditions of Mr Rossato’s employment, as contained in the applicable enterprise agreement and contractual documents, and concluded that the parties deliberately avoided a firm commitment to continuing employment beyond the completion of a particular assignment of work. The court observed that the label ‘casual’ might influence the interpretation of the actual rights and obligations set by such arrangements, and that an agreement to pay a loading in lieu of entitlements associated with an ongoing employment relationship was a compelling indication that there was no firm advance commitment to an ongoing employment relationship.
Limited implications for Commonwealth employers
The decision has limited implications for Commonwealth employers because of the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021, which amended the FW Act after the Full Court’s decision in Rossato but before the hearing in the High Court. The amendments relevantly inserted a new statutory definition of ‘casual employee’ into the FW Act which focuses on the parties’ offer and acceptance of employment rather than their subsequent conduct (s 15A). This new statutory definition requires a narrower set of factors to be taken into account in determining whether an employee is a casual than the factors taken into account by the Full Federal Court in Rossato and Skene.
The amendments apply both prospectively and retrospectively, except where a court has already made a binding decision that a person is not a casual employee. Accordingly, the High Court’s decision will only have practical implications for a Commonwealth employer if a court has already made a decision, relying on the Full Court’s decisions in Rossato and Skene, that a particular employee or group of employees is not casual.
AGS lawyers will discuss this decision and other issues relating to casual and non-ongoing employment at a Virtual Employment Update on Thursday 12 August 2021 at 12:30 – 1:30 pm AEST. For more information contact email@example.com.
Text of the decision is available at: WorkPac Pty Ltd v Rossato  HCA 23 (4 August 2021) (austlii.edu.au)
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