Workpac v Rossato
This case concerned the employment of Mr Rossato by Workpac Pty Ltd (Workpac), a labour hire agency. Over several years, Mr Rossato was employed by Workpac as a ‘Casual Field Team Member’ to provide services to Glencore Australia Pty Ltd at several Queensland coal mines.
At all relevant times, Workpac engaged and paid Mr Rossato as a casual employee and as such did not pay him any annual leave or other paid leave entitlements. When Mr Rossato retired, he then claimed that he was a permanent employee and sought payment for his leave entitlements.
Workpac first sought a declaration from the Federal Court that Mr Rossato was not entitled to the claimed leave payments and that he was a casual employee. Workpac also claimed that if Mr Rossato’s employment had been mischaracterised, that the casual loadings paid to him should reduce the amount of any leave payable by a commensurate amount.
The Federal Court held that Mr Rossato was a permanent employee and not a casual employee for various reasons, including that when the totality of his employment circumstances were considered, Mr Rossato had an expectation of continuing work according to an agreed pattern. Importantly, the Federal Court placed more emphasis on the regularity of Mr Rossato’s roster and less emphasis on his employment contract that stated he was employed on an “assignment by assignment” basis.
As a consequence, the Federal Court held that Mr Rossato was entitled to be paid annual leave as a permanent employee but also to keep the casual loadings paid to him.
However, the High Court on 4 August 2021, overturned the earlier Full Court decision.
The High Court held that Mr Rossato was a casual employee because:
- his contract of employment clearly stated he was a casual employee engaged on an assignment by assignment basis;
- his rosters did not establish a commitment to ongoing employment after each assignment finished; and
- Mr Rossato worked as a casual employee on an assignment by assignment basis, consistent with his employment contract.
Implications for employers and their casual employees
Firm advance commitment
The High Court accepted the prevailing understanding of lawyers and employers alike, that casual employment is characterised by no firm advance commitment as to the duration of the employee’s employment or the days and hours the employee is expected to work.
Importantly, the High Court held that Mr Rossato’s regular and systematic roster was not inconsistent with the definition of casual employment because his employment was time limited to the length of each assignment. However, employers should still be cautious about implementing regular work rosters for their casual employees because it is still a factor which may be considered by a court should a casual employee claim leave payments.
The High Court held that whether Mr Rossato was a casual employee with a firm advance commitment for ongoing employment must be determined by reference to the enforceable terms within the contractual arrangement between the employee and employer. It was not to be determined by the unenforceable expectations or understandings thought to exist by the parties.
An employer who gives clear expression to the casual nature of the employment and confirms that work is offered to the employee with no firm advance commitment as to the duration or the days and hours they are required to work will have more certainty that the employee’s casual status will not be disturbed by a Court or Tribunal.
For employers and employees operating within the state employment system (that is, not covered by the Fair Work Act 2009 (FW Act)), the High Court’s decision is instructive of the circumstances in which a state court or tribunal should find that a person was engaged as a casual employee.
Amendments to the Fair Work Act 2009 regarding casual employees
The High Court’s decision in Rossato reflects recent changes to the FW Act and provides guidance on factors that Australian courts should consider when determining whether a person is engaged on a casual basis.
In March 2021, the Federal Government introduced legislative amendments including a statutory definition of casual employee and what factors are relevant to the characterisation of an employee as a casual.
The FW Act inserted the following definition of casual employee:
- a person who receives an offer of employment that is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work; and
- accepts that offer on that basis; and
- is an employee as a result of that acceptance.
Relevant factors which are to be considered when determining if someone is a casual employee include:
- whether the employer can elect to offer work, and whether the person can accept or reject the work;
- whether the person will be work as required according to the needs of the employer;
- whether the employment is described as casual employment; and
- whether the person will be entitled to a casual loading or a specific rate of pay for casual employees.
Additionally, a regular pattern of hours does not of itself indicate a firm advance commitment.
Key takeaways
In drafting any casual employment contract, dentists should take time to carefully word the contract in such a way that it specifies that the employee is engaged on a casual basis and there is no firm advance commitment to ongoing employment.
If you would like to know more about how your business can manage risk and introduce greater certainty into your employment arrangements, please contact Panetta McGrath’s Employment and Workplace Relations team on (08) 9321 0522.
