Australia: Rossato decision by High Court aligns with new casual employee legislative changes

The High Court has delivered its much-anticipated decision regarding the appeal by WorkPac Pty Ltd (WorkPac) of the decision of the Full Court of the Federal Court of Australia (the Full Court) in WorkPac Pty Ltd v Rossato [2020] FCAFC 84 (the Full Court's Decision).

The High Court has unanimously held that Mr Rossato was a casual employee of WorkPac and has allowed WorkPac's appeal, setting aside the Full Court's Decision.

Facts

Between 28 July 2014 to 9 April 2018, Mr Rossato was employed as a 'Casual Field Team Member' by WorkPac, a labour-hire company. WorkPac's business includes the provision of services of its employees to firms engaged in the mining of black coal to its clients.

WorkPac engaged Mr Rossato to provide his services to its client Glencore Australia Pty Ltd (Glencore), whose workforce is comprised of both its own employees and workers sourced through WorkPac and other labour-hire companies. Mr Rossato provided his services at two of Glencore's mines in Queensland as a production operator.

At all relevant times, the following documents applied to Mr Rossato's employment with WorkPac:

• six contracts, (which were also referred to as 'assignments') all entitled 'Notice of Offer of Casual Employment - Flat Rate', except for the third contract, which was entitled 'Notice of Offer of Casual Employment' (the Six Assignments);
• WorkPac's enterprise agreement (the Enterprise Agreement); and
• a single page document entitled, 'Casual or Maximum Term Employee Terms and Conditions of Employment- Employee Declaration' (the General Conditions).

During the course of Mr Rossato's employment, WorkPac treated Mr Rossato as a casual employee. Accordingly, Mr Rossato was not given paid personal leave, annual leave, compassionate leave and public holiday entitlements under the National Employment Standards (NES) in the Fair Work Act 2009 (Cth) (the FW Act) and the Enterprise Agreement (the Entitlements).

After Mr Rossato's retirement in 2018, Mr Rossato claimed that he was not a casual employee of WorkPac and demanded payment in respect of the entitlements from WorkPac in reliance on the decision of WorkPac Pty Ltd v Skene (2018) 264 FCR 536 (Skene). WorkPac sought declarations from the Federal Court of Australia that Mr Rossato was a casual employee under the FW Act and was therefore was not entitled to claim the entitlements.

The Full Court held that Mr Rossato was not a casual employee for the purposes of the FW Act and the Enterprise Agreement and was entitled to the entitlements. WorkPac sought special leave to appeal to the High Court, which was granted.

Decision

The High Court held that to determine whether there is casual employment, the following factors must be considered:

• there must be no 'firm advance commitment' to ongoing work;
• causal employment is characterised with irregularity, such as uncertainty, discontinuity, intermittency and unpredictability;
• a mere expectation of continuing employment, however reasonable, is not considered to be a 'firm.commitment' and is not a basis for distinguishing the employment of other employees from that of a casual employee;
• if there is a written employment contract that contains terms regarding the employment relationship between the employer and the employee, the Court will look at those terms and the binding obligations to determine whether there is a 'firm advance commitment';
• for a 'firm advance commitment' to exist there must be enforceable terms in the employment contract, not the unenforceable expectations or understandings that might be said to reflect the manner in which the parties performed their agreement;
• labelling an employee as 'casual employee' is not decisive, rather the character of the relationship between the parties is established by the rights and obligations of the parties; and
• whether the parties expressly agree that the employee will be paid a loading in lieu of entitlements.

In applying the above to Mr Rossato's employment, the High Court held that:

• the General Conditions contained a clause that stated Mr Rossato's work was on an 'assignment-by-assignment basis', Mr Rossato was entitled to accept or reject an offer of assignment, and WorkPac was under no obligation to offer any further assignments; and
• the Full Court erred in attributing Mr Rossato's systematic allocation of shifts by Glencore as significant to the characterisation of Mr Rossato's employment relationship, as there was still an absence of a full advance commitment to work beyond the completion of a particular assignment by Mr Rossato.

Ultimately, the High Court held that Mr Rossato was a casual employee for purpose of the FW Act in respect of the Six Assignments and a 'Casual Field Team Member' under the Enterprise Agreement.

Implication for employers

In addition to the guidance provided by recent changes to the FW Act in March this year, the decision in Rossato provides further clarity for employers - a timely reminder. The clarity provided in Rossato indicates how courts are likely to apply the new FW Act definitions of casual employee and the importance of clear contractual arrangements. Employers are reminded to examine their casual employee arrangements as soon as possible, to ensure compliance and the opportunity to mitigate against future claims.

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