In a highly awaited decision regarding casual employees’ entitlements, the High Court of Australia (HCA) has delivered its landmark decision overturning a Full Federal Court decision by denying Mr Rossato the ability to obtain benefits under the National Employment Standards (NES).
The background
Mr Rossato was employed by WorkPac between 28 July 2014 and 9 April 2018 until his retirement pursuant to a series of six contracts, or "assignments". Workpac treated Mr Rossato as a casual employee.
On 2 October 2018, Mr Rossato wrote to WorkPac alleging that he was entitled to be paid for untaken annual leave, public holidays, and periods of personal leave and compassionate leave. These entitlements were said to be due under the Fair Work Act 2009 (Cth) (FW Act) and the WorkPac Pty Ltd Mining (Coal) Industry Enterprise Agreement 2012 (the Enterprise Agreement) which governed his employment.
The decision at trial
On 2 June 2020, Barry. Nilsson. wrote about the Full Court of the Federal Court of Australia (FCFCA) decision which can be accessed here. In short, the FCFCA found that Mr Rossato, who was labeled as a casual employee under the applicable employment contracts was in fact an employee ‘other than casual’ under the FW Act and was accordingly entitled to the payments he claimed.
The decision created a flurry of employer concern regarding the status of employees and their ability to claim entitlements such as annual leave, public holidays, personal leave and compassionate leave.
In issue
- The HCA was required to consider whether Mr Rossato was a casual employee for the purposes of the FW Act and the Enterprise Agreement.
The HCA decision
The HCA unanimously determined that:
- there was no ‘mutual commitment’ in the contractual arrangements to an ongoing working relationship between WorkPac and Mr Rossatto subsequent to the completion of each assignment. As such, any commitment to further work needed to be accounted for in an enforceable agreement;
- maintaining an ‘expectation of continuing employment’ is insufficient to characterise one as being a casual employee from other forms of employment;
- Mr Rossato’s entitlement to remuneration was agreed by him on the basis of express terms of the relationship; and
- it did not have the role of attempting to moderate any purported unfairnesses because of discrepancies (if any) within each party’s bargaining power.
Implications
This decision overturns the risk employers would have likely faced from having casual employees being able to ‘double dip’ by virtue of receiving the 25% casual loading in lieu of entitlements plus the minimum NES entitlements afforded to part-time and full-time employees. The decision highlights that payment of a casual loading is very much a strong indicator that an employee is in fact casual, and that the written contractual arrangements can likely be relied upon.
Notwithstanding the above, employers need to be cognisant of not characterising an individual’s employment as ‘casual’ in circumstances where they are treated to the contrary. The Courts will place a substantial emphasis upon the terms of engagement (particularly any written employment contracts) when making such determination.
