A casual is a casual: High Court upholds Workpac's appeal in Workpac v Rossato consistent with legislative changes

The High Court recently handed down its decision on WorkPac's appeal [1] regarding how you define and classify casual employees. The decision to uphold Workpac's appeal, coupled with the recent amendments this year to the Fair Work Act 2009, provides more confidence for employers on how casual employees are defined under Australian law.

What is the impact of this decision?

The statutory definition of 'casual employee' was recently introduced into the Fair Work Act (Act). This decision pre-dates that statutory inclusion. The statutory definition now prevails. However the case may provide employers with some guidance regarding how that 'casual employee' definition will be applied.

When assessing whether an employee is a casual, the High Court emphasised the importance of what is agreed between an employer and employee at the time the employment contract was entered into. Consistent with the new statutory definition, the High Court considered that the assessment of the nature of Rossato's employment did not involve reviewing the way the employment unfolded after he agreed to his employment contract.

Key takeaways in respect of casual employees:

• Employers should record the terms and conditions of employment in a written employment contract at the commencement of employment, including that the employee is engaged as a casual.
• A written employment contract will often be the best evidence of what was agreed between an employer and employee.
• In contractual negotiations, employers should be careful not to make representations that an employee is being engaged, or will later in the relationship be engaged on a permanent basis. Representations to be avoided include that the employment will be ongoing or that the employee cannot refuse shifts.

Employers should also remember that there are other relevant factors:

• Conversion from casual to permanent - new casual conversion obligations have also been introduced into the Act, providing certain conversion rights for casual employees who have worked for an employer for at least 12 months and who have worked a regular pattern of hours in the last six months; and
• Enterprise agreements - different considerations may apply in the case of enterprise agreements.

Background

Mr Rossato was a production worker employed by WorkPac under a series of six casual contracts to perform work for one of WorkPac's clients. Mr Rossato claimed that he was not a casual employee because he performed regular, constant and predictable work under six assignments. He claimed that he was a permanent employee and therefore was entitled to have untaken annual leave, public holidays and periods of leave during his employment.

At trial, the Full Federal Court held that:

• Mr Rossato was a permanent employee because his employment, when viewed as a whole, did not reflect casual employment, which is exemplified by irregular, uncertain and unpredictable employment.
• As a result, Mr Rossato was entitled to payment for annual leave, paid personal/carer's leave, paid compassionate leave and payment for public holidays.
• WorkPac was not entitled to restitution or to set off the 25% casual loading paid to Mr Rossato against the permanent entitlements owed.

The Federal Court's decision was particularly controversial because not only was Mr Rossato found to have been a permanent employee despite his contracts stating that he was a casual, but also because Workpac was prevented from setting off the casual loading paid, Mr Rossato was essentially able to 'double dip' on his entitlements.

The High Court's Decision

On appeal, the High Court's decision unanimously overturned the earlier Full Federal Court's decision, finding that Mr Rossato was a casual employee and that his employment was on an 'assignment-by-assignment basis'.

In determining whether an employee is casual, the High Court considered:

• The test to be applied is whether there is a firm advance commitment to continuing and indefinite work.
• Parties must look to the terms of the contract agreed between the parties at the time the contract was entered into.
• Parties should not look to subsequent 'conduct' or 'expectations'.
• Casual employment can be long-term and regular.

In summary, the High Court found that Workpac and Rossato had not agreed that the employment would be on an ongoing basis. In particular, because the written terms and conditions of Mr Rossato's employment expressly provided that the employment was on an 'assignment-by-assignment basis', Mr Rossato could accept or reject an offer of an assignment and WorkPac was under no obligation to offer further assignments.

Impact of statutory changes

While the Rossato decision reflects a legal position on casual employment that many employers have hoped for, the new statutory definition of 'casual employee' limits the practical impact of the decision.

It is important that employers remember to look at the statutory definition of 'casual employee' in section 15A of the Act to ascertain whether it is engaging casuals in a manner that is consistent with the Act.

More information from Maddocks

For more information, contact Maddocks on (03) 9258 3555 and ask to speak to a member of the Employment team.

More Cleardocs information on related topics

You can read earlier ClearLaw articles on Employment or HR topics here.

Order related document packages

• Standard Employment Contract
• Service Agreement
• Deed of Confidentiality

[1] Workpac v Rossato & Ors [2021] HCA 23