On 4 August 2021 the High Court of Australia (‘HCA’) released an important decision in relation to casual employment.
In WorkPac Pty Ltd v Rossato & Ors [2021] HCA 23, the HCA majority decision has allowed and upheld an appeal by WorkPac to the Full Court of the Federal Court (‘FC’) decision in WorkPac Pty Ltd v Rossato [2020] FCAFC 84.
The FC decision was that Rossato was not a casual employee, despite being offered and contractually employed as a casual employee and paid a casual loading. The FC also found that WorkPac could not use the casual loading paid to set-off any permanent leave entitlements.
WorkPac Appealed to the HCA, arguing that the FC should have found that Rossato was a casual employee.
In an alternative appeal ground, WorkPac argued that the FC made an error in relation to the declarations sought by WorkPac that they should be entitled to offset the value of the casual loading paid to Rossato against the value of any entitlements.
The HCA decision allowed the first appeal ground and was not required to consider the second.
The HCA majority decision, overturning the FC decision, was that Rossato was, at all times during his employment with WorkPac, a casual employee for the purposes of sections 86, 95 and 106 of the Fair Work Act 2009 (Cth) (‘FW Act’).
The HCA also held that Rossato was a casual "Field Team Member" for the purposes of the WorkPac Pty Ltd Mining (Coal) Industry Enterprise Agreement 2012 (the ‘Agreement’).
Background
Between 2014 and 2018, Rossato was engaged by WorkPac, a labour hire company, to work for Glencore in one of it's Queensland coalmines.
Over the course of 4 years, Rossato was issued with six separate and consecutive employment contracts (‘Assignments’). During each Assignment, Rossato was engaged as a casual “Field Team Member”.
In 2018, despite being engaged and paid as a casual Rossato wrote to WorkPac claiming he was entitled to payment of certain leave entitlements. Rossato was relying on the decision in WorkPac v Skene[1]; a significant decision involving his former employer where the FC found that Skene was not a casual employee for the purposes of being entitled to leave entitlements.
WorkPac subsequently commenced proceedings in the FC seeking declarations confirming:
- Rossato was a casual employee rather than a permanent one; and
- If the FC reached the view that Rossato was a permanent employee and owed entitlements as a result, that WorkPac should be entitled to offset the value of the casual loading paid to him against the value of these entitlements.
The Federal Court Decision
The FC found that having regard to all of the circumstances of Rossato’s employment, his employment was regular, systematic and with a firm advance commitment of work.
The FC found that Rossato was not a casual employee and that the circumstances of his employment were similar to Skene.
The FC held that the description parties use to categorise their employment relationship ie stating an employee is casual in an employment contract, is not determinative nor conclusive of the entirety of the employment arrangement.
The FC looked at how Rossato worked, which included predictable and systematic rosters which operated on a 7 days on/7 day off basis, with some rosters being set some 12 months in advance. The FC noted that this conduct was indicative of a “firm advance commitment” between the parties to be engaged on an “on-going” indefinite employment rather than a casual one.
The FC also held that WorkPac could not use the casual loading to offset a claim for permanent entitlements because the casual loading is paid on the basis that the employee is not entitled to the leave entitlements (by virtue of being casual), and is therefore not paid in lieu of the employee receiving the entitlements.
The High Court Appeal and Decision
On 17 June 2020 it was announced that WorkPac had sought special leave to appeal the FC decision to the HCA.
The HCA allowed the first appeal ground, set aside the FC decision and found that Rossato's employment was casual.
In the 4 August 2021 decision the HCA found that Rossato was entitled to accept or reject an Assignment and WorkPac was under no obligation to offer further work when an Assignment finished.
The HCA found that there was no firm advance commitment and this was reflected in each of the Assignments. In effect the HCA found that what occurred during each Assignment in relation to hours of work and rosters and the fact that there had been multiple assignments did not change the fact that no firm advance commitment had been made on commencement of each Assignment.
Because the HCA found that Rossato was at all times a casual employee, the HCA was not required to consider WorkPac's alternative appeal ground.
Implications
The result is that the HCA found that a casual employee is;
‘an employee who has no firm advance commitment from the employer as to the duration of the employee's employment or the days (or hours) the employee will work, and provides no reciprocal commitment to the employer’
The HCA found that that where a written contract exists and the terms of the contract have been followed, the written contract will determine whether a firm advance commitment exists.
The fact that an employee might have an expectation of continuing employment on a regular and systematic basis does mean that permanent employment exists.
The hearing took place in May after the Fair Work Amendment (Supporting Australian’s Job and Economic Recovery) Act 2021 (‘Amendment Act’) took effect in March inserting a new casual definition in section15A of the FW Act.
While the definition applies retrospectively, the HCA was not able to consider this case in light of the new casual definition as the FC decision had already found that Rossato was a casual employee. The HCA had to consider the appeal based on the terms of the FW Act when the FC made their decision.
Despite this, the HCA decision is consistent with the new casual definition and provides employers with some further certainty but also highlights the importance of a written contract that makes no firm advance commitment.
The Amendment Act also inserted a new provision in section 545A of the FW Act that applies retrospectively and allows an employer to offset the value of any casual loading paid against a finding by a court that an employee was not a casual employee and was therefore entitled to paid leave. The casual loading must be identifiable as a payment made in lieu of entitlements payable to a permanent employee.
The HCA decision did not determine WorkPac’s second appeal ground regarding offsetting. However the FC decision was made before the offsetting provision was inserted in the FW Act and the HCA commented that these new offsetting provisions apply to other employee’s retrospectively.
The HCA decision also has no impact on the new casual conversions requirements inserted into the National Employment Standards (‘NES’) by the Amendment Act. The new casual conversion requirements in the NES continue to apply.
QHA members seeking more information or wishing to discuss a specific employment relations matter are encouraged to contact the Employment Relations Department for a confidential discussion by calling (07) 3221 6999 or emailing er@qha.org.au.
[1] WorkPac v Skene [2018] FCAFC 131
