On 4 August 2021, the High Court of Australia unanimously upheld the appeal of WorkPac Pty Ltd, ruling that contrary to the decision of the Full Federal Court, Mr Robert Rossato was a casual employee under the Fair Work Act 2009 (Cth) (the Act) and the applicable enterprise agreement (WorkPac Pty Ltd v Rossato [2021] HCA 23).

The widely anticipated judgement settles the legal position on casual employment, following a succession of decisions arising from the Federal Court which has contributed to much uncertainty for employers.

Background

To recap, Mr Rossato was employed by WorkPac as a casual mining worker for three and a half years, under six consecutive casual contracts or ‘assignments’. Mr Rossato’s roster was fixed on a weekly basis and sometimes scheduled months in advance.

The Full Court of the Federal Court upheld Mr Rossato’s claim, that he was a permanent employee, relying on the fact that:

  • he was employed for an ‘indefinite duration’;
  • there was a ‘firm advance commitment’ to work by both parties; and
  • his employment was ‘stable, regular and predictable’.

On this basis, the Federal Court ruled that Mr Rossato should have accrued and had been paid entitlements of a permanent employee (annual leave, sick pay etc) during his employment.

High Court Ruling

The High Court’s unanimously overturned the decision of the Full Federal Court.

There was consensus between the parties and the Court that casual employees are those with no firm advance commitment of ongoing work, and the High Court questioned whether such a commitment existed in Mr Rossato’s employment.

The Court found:

  • that the ‘mere expectation of continuing employment’ is not enough to set apart casual employment from other types of employment;
  • ‘the existence or otherwise of a “firm advance commitment” must be for enforceable terms’. That is, any commitment to further ongoing work, must be found in the terms of an enforceable agreement (like an employment contract);
  • Mr Rossato’s consecutive casual contracts demonstrated employment on an ‘assignment-by-assignment’ basis, where it was left to him whether he wished to accept or reject further casual work/assignments;
  • the ordinary meaning of the terms set out in Mr Rossato’s contracts, lack a firm advance commitment to further work upon the completion of the contract and required an hours’ notice for termination of the contract;
  • while Mr Rossato’s rosters seemed to have ‘the qualities of regularity and systematic organisation during the period of each assignment, those qualities have been demonstrated to be entirely compatible with the notion of “casual employment” in the Act’; and
  • Mr Rossato’s payment of casual loading as set out in the contract was a clear indication of casual employment.

Key takeaways 

This decision, along with the amendments to the Act providing a statutory definition of ‘casual employee’ at s 15A, provide clarity for schools with long-term casual employees. Key considerations are:

  • A firm advance commitment of ongoing employment is not the same as a reasonable expectation of ongoing employment. Casual employees can already reasonably expect to have an ongoing employment relationship with the employer, for example the National Employment Standards allows them to access flexible working requests or accessing unpaid parental leave. This expectation of ongoing employment does not mean it establishes their status as permanent employees;
  • A long-term casual’s advanced rostering and regular and systematic hours may establish reasonable expectation of ongoing employment but will not determine a permanent employment relationship. Instead, the courts will recognise, and employers can rely on, the express terms in the casual employee’s employment contract rather than upon the ‘unenforceable expectations or understandings’ of employees.
  • This means, employers can engage regular and systematic casuals, but ensure the employee’s casual contract does not contain terms which formally establish a mutual commitment to an ongoing working relationship following the completion of their shift or assignment; and
  • The payment of casual loading instead of paid entitlements applicable to permanent employees is a key indicator of casual employment.  

To ensure casual employees and their employment contracts are consistent with the settled position of the High Court, Schools are strongly encouraged to review the current casual contracts in place to ensure that they:

  • Expressly state the employee’s status as a casual (as well as all communications relating to the employees’ employment), with reference to the definition of a casual employee in the Act;
  • Include an appropriate offsetting clause; and
  • Expressly state the payment of casual loading in the employee’s contract and in their payslips.

Please contact the Workplace Management Team at AISNSW on 9299 2845 if you wish to discuss or seek to review your employment contracts, or seek further advice on casual employment, following the High Court’s decision.