August 4, 2021
The High Court of Australia has today unanimously upheld WorkPac’s appeal against a judgment of the Federal Court about the nature of casual employment: WorkPac Pty Ltd v Rossato  FCAFC 84
So what is a casual employee?
With certainty, we can now say that:
- we have a statutory definition of a “casual employee” in the FW Act;
- which has been practically applied by the High Court of Australia.
Crucially, the High Court held that a reasonable expectation of continuing employment is simply not the kind of firm advance commitment to continuing employment the absence of which typifies casual employment.
Was Mr Rossato a casual employee?
The High Court found that Mr Rossato was at all times, a casual employee of WorkPac both under the Fair Work Act 2009 (Cth) (FW Act) and the enterprise agreement that applied during Mr Rossato’s employment because:
- the contractual arrangements between WorkPac and Mr Rossato did not include a mutual commitment to an ongoing working relationship between them after the completion of each assignment;
- the express terms of the relationship between WorkPac and Mr Rossato were distinctly inconsistent with any such commitment; and
- Mr Rossato’s entitlement to remuneration was agreed on that basis.
Here is the clincher: just because Mr Rossato had a roster that exhibited features of regularity and consistency, it did not mean that there was a commitment between the parties to an ongoing working relationship after each assignment was completed.
What about set off?
Given this, it was unnecessary for the High Court to consider WorkPac’s set off and restitution claims. For now, reliance can be placed on the new provisions in the FW Act which were recently inserted to avoid double-dipping.
What does this all mean?
The decision, which we set out in more detail below, is a stunning decision for practicality, certainty and commerciality. It puts to bed the turbulent history of case law concerning casual employees. The High Court has in effect gone back to the common law approach which was in part departed from by the Federal Court in both WorkPac decisions.
Employers and employees alike can take great comfort from the High Court’s decision and the Federal Government’s statutory definition of casual employee introduced into the FW Act.
The HCA Decision
In determining whether Mr Rossato was a casual employee for the purposes of the FW Act and under the 2012 EA, the HCA considered:
- whether there was a firm advance commitment;
- whether written contractual obligations reflected a firm advance commitment;
- the meaning of patterns of work and rosters made in advance; and
- the expectation of continuing employment as distinct from a firm advance commitment.
The FW Act
Mr Rossato was found to be a casual employee for the purposes of ss 86, 95 and 106 of the FW Act in respect of each of the six assignments with WorkPac between 28 July 2014 and 9 April 2018.
The HCA found that s 65(2)(b)(i) of the FW Act contemplates that a casual employee may hold casual status despite being “a long term casual employee” employed on a “regular and systematic basis”. Further, that s 65(2)(b)(ii) demonstrates that the FW Act does not regard a “reasonable expectation of continuing employment” to be inconsistent with the nature of casual employment.
The High Court acknowledged that while over time, Mr Rossato may have developed an ‘expectation of continuing employment’, this expectation remains a ‘mere expectation’, distinguishable from a ‘firm advance commitment’.
The fact that Mr Rossato’s pattern of work was governed by shifts fixed long in advance was found not to be evidence of any commitment to a continuing employment relationship following the completion of an assignment.
The High Court found that the various contracts between WorkPac and Mr Rossato precluded a ‘mutual commitment to an ongoing working relationship between them after the completion of each assignment’. Further, that Mr Rossato was paid in accordance with this understanding.
The High Court considered that as Mr Rossato’s work was expressly on an ‘assignment-by-assignment basis’, he was able to accept or reject any offer of an assignment and that the Full Court erred in characterising the established shift structure as a future commitment, as it did not promise work beyond the completion of each assignment.
The Court made reference to the binding contractual obligations of the parties to find there was a lack of firm advance commitment in the General Conditions. In fact, they were all consistent with terms and conditions of casual employment, remunerated with a casual loading of 25%.
Because the High Court has found Mr Rossato was at all times a casual employee under both the FW Act and the relevant enterprise agreement, it was unnecessary to consider WorkPac’s submissions in relation to whether it was entitled to set off or seek restitution for the casual loading paid during his employment.
What does this mean for employers?
We now have a definition for “casual employee” in the FW Act in s 15A.
We also now have a practical application to the many facets of casual employment at common law which is consistent with the statutory definition.
When employing a casual employee, it is important to ensure that:
- The offer is in writing and sets out the basis for the casual employment, consistent with s 15A of the FW Act – remember there can be no firm advanced commitment to continuing and indefinite work according to an agreed pattern of work.
- The written contract expressly includes the basis for payment, including the fact that a causal loading is being paid.
A reminder to all employers that the Fair Work Commission (FWC) is set to make changes to casual terms in modern awards by 27 September 2021. The review will reconcile relevant terms in modern awards with the definition of casual employment in s 15A of the FW Act and casual conversion arrangements introduced earlier this year.
Kingston Reid will provide you with an update once the FWC has finalised its review.
If you have any questions, do please contact us.