In August, the High Court of Australia unanimously overturned the Federal Court's earlier decision in WorkPac v Rossato (WorkPac v Rossato) and handed down its landmark decision on casual employment.
In the High Court's decision, they found that Mr Rossato was a casual employee under the Fair Work Act 2009 (Cth) (Fair Work Act) and WorkPac's Enterprise Agreement. As a result, Mr Rossato was not entitled to paid annual and sick leave, nor was he eligible for any entitlements under WorkPac's Enterprise Agreement.
Mr Rossato, a qualified and experienced production employee in the coal mining industry, was employed by WorkPac, a labour-hire company, to perform labour. Rossato was employed under six consecutive contracts for four (4) years from 2014 onwards.
After he ceased his employment with WorkPac, Rossato claimed that his regular and systematic hours meant that he was a permanent employee. Following the Federal Court's decision in WorkPac Pty Ltd v Skene (Skene), he reached out to WorkPac to claim outstanding entitlements as a permanent employee. WorkPac denied Mr Rossato's claim.
The Federal Court found that Mr Rossato's employment had a 'firm advance commitment' having regard to his employment contract and that the circumstances of the case were not materially different than the earlier decision of Skene. Therefore, Mr Rossato was initially found not a true casual employee. Therefore, he was entitled to his accrued and unpaid entitlements.
The High Court's Decision
WorkPac successfully appealed the decision of the Federal Court. The High Court held that the test of a casual employee is one 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".
However, the High Court rejected the approach that the Federal Court took which was to look at the parties' conduct. Instead, the High Court determined the correct interpretation was to be determined solely by reference to the contract terms at the time the employee was engaged. The notion of looking at the whole of the relationship between the parties to characterise the nature of the employment was in error.
In reviewing Rossato's employment contract, the High Court found that the express terms within the contractual arrangements for each agreement between WorkPac and Rossato did not include a mutual commitment to an ongoing working relationship when the assignments ended.
The entitlements to remuneration for Rossato were also agreed on that basis. His obligations were determined by the contractual agreements, and the consistency and regularity of his work rosters did not establish a 'firm advance commitment' and therefore, he was a casual employee.
The Court made clear that the reasonable expectation of continuing employment on a regular and systematic basis as contemplated within the FW Act is consistent with the nature of casual employment, and the non-contractual aspects of Rossato's employment were not to be taken into consideration of establishing a 'firm advance commitment'.
The High Court also found that roster systems have limited significance when determining whether an employee is a casual or permanent employee.
The High Court has confirmed that the contract of employment is used in determining the nature of casual employment. The FW Amendments that came earlier this year as a result of Skene and the High Court's decision will now provide employers with certainty where they engage employees under casual employment contracts.
Employers should very carefully review their casual employment contracts to ensure that the terms and arrangements in the employment contract are consistent with the High Court's findings. There should be a focus on whether the employment agreement conveys any 'firm advance of commitment'.
Employers should also provide a copy of the Casual Employee Information Statement and the Fair Work Information Statement to new casual employees prior to their employment.
To read the full judgement of WorkPac vRossato, click here.
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