On Wednesday 4 August, 2021 the High Court of Australia (HCA) unanimously upheld WorkPac’s appeal against the Full Court of the Federal Court of Australia’s (FCA) 2020 decision, finding its former employee, Robert Rossato, was in fact a casual employee at law (WorkPac Pty Ltd v Rossato  HCA 23).
While the legal implications of the decision are much less significant than they otherwise would have been, given the intervening passage of the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 (Cth) and the new definition of “casual employee” at section 15A of the Fair Work Act 2009 (Cth) (FW Act), there are still some useful takeaways from the judgment.
A key feature of casual employment is the absence of a firm advance commitment of ongoing employment. This is a reasonably high threshold.
A firm advance commitment is different to a reasonable expectation of continuing employment. The latter isn’t inconsistent with casual employment, and is in fact recognised as a feature of casual employment elsewhere in the FW Act; for example, in respect of requests for flexible working arrangements under the NES and the qualifying period for unfair dismissal eligibility.
An employee’s contract of employment will be integral in determining whether a firm advance commitment exists. In departing from the approach taken by the FCA, the High Court found it was inappropriate to place greater emphasis on “unenforceable expectations or understandings” which might have developed on behalf of either party during the relationship, than express contractual terms.
Characteristics of the employment relationship - like working in accordance with a roster - might foster a sense of regularity and consistency in the relationship, but won’t override relevant contractual terms. In this case, the contract committed each party only for the duration of each “assignment”; the provision of a roster covering a longer period was no guarantee that any future assignments would actually be worked.
Provided the contract doesn’t contain terms which give rise to a firm advance commitment, it will be determinative in characterising the relationship as casual.
Because the HCA found the employee was in fact a casual, it wasn’t necessary to further consider the potential for the employer to “set off” unpaid entitlements against the casual loading.
Given the legal position now appears settled from both a legislative and common law perspective, how can employers best protect themselves? In short, by implementing written contracts of employment which:
- Clearly designate the employee as a casual by reference to the definition of a “casual employee” in the FW Act; and
- Specify the employee’s payment arrangements, including the fact that casual loading is payable.
If employers have already updated their contracts in line with the new definition of “casual employee” inserted at section 15A of the FW Act earlier this year, there is likely no need to make further contractual changes in response to the High Court’s Decision.
If you are an employer who has not reviewed the terms of your casual contracts for some time (and particularly if you have no written contracts for casuals), you should seek advice as a matter of priority.
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