09 Aug High Court hands down decision in WorkPac Pty Ltd v Rossato

The High Court has handed down its much anticipated decision in WorkPac Pty Ltd v Rossato [2021] HCA 23 (“Rossato”).

Background

WorkPac Pty Ltd (“WorkPac) was granted special leave to appeal the earlier decision of the Full Court of the Federal Court of Australia in WorkPac Pty Ltd v Rossato [2020] FCACF 84 (“Federal Court decision”) to the High Court.

The Federal Court decision found that Mr Rossato was not a true casual employee for the purposes of the Fair Work Act 2009 (Cth) (“FW Act”) and the enterprise agreement under which Mr Rossato was engaged.   As such, it was held that Mr Rossato would be entitled to payments of annual leave, public holidays and personal and compassionate leave taken during his employment with WorkPac.  This decision created the risk of employee “double dipping” due to the employee being entitled to the entitlements of a permanent employee  despite having been paid a loading for payment in lieu of permanent entitlements. You can read more about the Federal Court decision in our previous article here – https://www.hrlaw.com.au/trouble-for-employers-as-decision-confirms-casual-double-dipping/

Issues on appeal

On appeal, WorkPac submitted that Mr Rossato was a casual employee for the purposes of the FW Act and a “casual FTM” for the purposes of the enterprise agreement. Alternatively, WorkPac argued Mr Rossato’s remuneration exceeded the amount he would have been entitled to as a permanent employee and that Rossato’s casual loading discharged his leave and holiday pay entitlements under the FW Act and enterprise agreement.

Mr Rossato submitted that he was not a true casual employee as he had “a firm advance commitment to his working hours” and relied on the roster that set the required working hours one year in advance. The High Court, however, dismissed Mr Rossato’s submission noting at paragraph [96]:

“while Mr Rossato might fairly be said to have had, over time, a reasonable expectation of continuing employment on a regular and systematic basis, that was not a firm advance commitment to continuing employment beyond the particular assignment.”

Decision

The High Court upheld the test of casual employment, being employment where the employee has no “firm advance commitment as to the duration of the employee’s employment or the day (or hours) the employee will work”.

When determining if there was a “firm advance commitment” to ongoing work, the High Court considered the contracts of employment entered into between WorkPac and Mr Rossato at the commencement of each assignment.  Upon this examination, the High Court found at paragraphs [105] and [106] that:

• the contractual arrangements between WorkPac and Mr Rossato did not include a mutual commitment to an ongoing working relationship between them after the completion of each assignment;

• the express terms of the relationship between WorkPac and Mr Rossato were distinctly inconsistent with any such commitment. Mr Rossato’s entitlement to remuneration was agreed on that basis;

• that the performance of Mr Rossato’s obligations was organised in accordance with Glencore’s rosters and thereby exhibited features of regularity and consistency did not establish a commitment between the parties to an ongoing working relationship after each assignment was completed; and

• in carrying out each assignment, Mr Rossato worked as a casual employee.

Practical Implications and tips

This year has seen significant changes to casual employment in Australia.  Earlier this year, the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 (Cth) amended the FW Act to provide a definition of a casual employee.  The amendments also give an employer the ability to off-set any casual loading payments if it is found that an employee was wrongly classified.  You can read further about these changes and others made, in our previous article here – https://www.hrlaw.com.au/hr-law-alert-changes-to-casual-employment/ or listen to our previous webinar – https://www.hrlaw.com.au/april-2021-webinar-significant-changes-to-casual-employment-everything-you-need-to-know/

The High Court decision in Rossato provides further clarity to the meaning of a casual employee and what the Courts will consider when determining if an employee is engaged on a casual or permanent basis.

The Rossato decision has made it clear that the contract of employment will be used to determine if the employment relationship is one of casual or permanent employment. This highlights the importance of ensuring employees are engaged under the correct contract of employment. If you would like assistance with reviewing the terms of your contracts of employment to ensure that the terms support the characterisation of casual employment in accordance with the FW Act and common law principles, in the context of the work being performed, contact the team at HR Law.