In a landmark decision, the High Court has today overturned the Full Federal Court’s decision in the matter of Workpac v Rossato, unanimously upholding Workpac’s appeal. The High Court ultimately held that Mr Rossato was properly characterised as a casual employee and therefore not entitled to paid leave while engaged on consecutive casual contracts with pre-programmed work well in advance.
See here for our previous update regarding the Full Federal Court’s decision.
This decision will alleviate many of the concerns held by employers in respect to the risks associated with engaging casual employees on a regular and systematic basis who may later assert that they are in fact permanent employees and therefore claim for paid leave entitlements.
The High Court in its decision clarified that:
- a ‘casual employee’ is one who has ‘no firm advance commitment’ from their employer regarding the duration of their employment or the days (or hours) the employee is to work, and provides no reciprocal commitment to the employer; and
- where parties commit the terms of their employment relationship to a written contract and subsequently adhere to the agreed terms, the requisite ‘firm advance commitment’ must be found in the binding contractual obligations of the parties.
Further the High Court stated that a mere expectation of continuing employment on a regular and systematic basis is not sufficient to establish that a casual employee is in fact permanent for the purposes of the Fair Work Act 2009 (Cth) (Act).
Specifically, regarding Mr Rossato’s circumstances, the High Court outlined that:
- Mr Rossato’s employment was expressly on an “assignment by-assignment basis” and therefore he was entitled to accept or reject any offer of an assignment, and at the completion of each assignment the company was under no obligation to offer further assignments;
- the fact that Mr Rossato worked in accordance with an established shift structure fixed long in advance by rosters (in some cases up to 12 months in advance) did not establish a commitment to an ongoing employment relationship beyond the completion of each assignment; and
- in Mr Rossato carrying out each assignment, he worked as a casual employee for the purposes of the Act and Workpac’s enterprise agreement for that assignment.
The decision highlights the importance of the contractual terms between the parties (and the parties’ subsequent conduct in relation to these terms) when establishing the ‘firm advance commitment’. The decision also provides some welcome relief for employers who, due to the nature of their operations, engage casual for a prolonged period on a shift roster.
Given the High Court’s findings that Mr Rossato was indeed a casual employee, it was considered unnecessary to consider whether Workpac was entitled to set off the casual loading paid to Mr Rossato against any paid leave entitlements he would have been due if he was a found to be a permanent employee.
Will there be an impact on casual conversion under the Act?
Whilst this decision is considered a massive win for employers, it will be interesting to see how this decision impacts on the new casual conversion provisions in the National Employment Standards of the Act, especially in light of the High Court’s comments around Mr Rossato being required to work in accordance with an established shift structure fixed long in advance by rosters, but this not establishing a commitment to an ongoing employment relationship beyond the completion of each assignment.
In our view, it may be that this decision widens an employer’s discretion to not offer eligible casual employees’ conversion to permanent employment under the Act.
Further information and details about the implications of this landmark decision will be provided shortly.
For further information on your obligations to casual employees, please contact us.