You would have seen reports in the media about the recent decision of WorkPac Pty Ltd v Rossato in the Full Court of the Federal Court of Australia.  The decision reconfirmed that a person paid and designated by their employer as a “casual employee” can still be considered a permanent part-time or full-time employee, despite a contract of employment stating otherwise.

Facts:

  • Mr Rossato had been employed by WorkPac under six consecutive contracts.
  • Each contract treated Mr Rossato as being in casual employment
  • Following the previous WorkPac v Skene decision in 2018 (Mr Skene was a FIFO casual employee with a regular pattern of work who had a remuneration that was inclusive of the casual loading), Mr Rossato claimed that he was not a casual employee and sought outstanding entitlements for annual leave, paid pesonal/carers leave, paid compassionate leave and public holiday payments under the Fair Work Act and the WorkPac enterprise agreement.

WorkPac commenced proceedings and sought directions on the following:

  • Mr Rossato was engaged as a casual employee at common law and for the purposes of the Fair Work Act and enterprise agreement
  • Mr Rossato’s pay incorporated a 25% casual loading and WorkPac were entitled to “set off” any amount owed to Mr Rossato
  • Failing the above, WorkPac was entitled to restitution (recovery) of part of the remuneration paid to Mr Rossato in accordance with the enterprise agreement

Casual employment at common law

  • The Full Court reiterated that, as in Skene, a casual employee is an employee who has no firm advance commitment from his or her employer to continuing and indefinite work according to an agreed pattern of work. A ‘firm advance commitment’ is likely to be absent where there are irregular work patterns, uncertainty, discontinuity, intermittency of work and unpredictability.
  • While the employment contract referred to casual employment, the Full Court also found that the subsequent actions of the parties may impliedly vary or amend the contract such that the true agreement between the parties is no longer reflected by the written contract.  In other words, it is relevant to look at the way in which the work is actually carried out.

Casual loading as a set off for amount owed

  • The Full Court held that “an obligation to provide a particular entitlement will not ordinarily be discharged by not providing the entitlement and by instead providing a substitute.”
  • WorkPac expressly designated in some of the employment contracts the purpose for which the various portions of the casual loading were made, but it did not include an entitlement to leave.

Entitled to restitution

  • The claim failed as the Full Court refused to accept that the casual loading paid to Mr Rossato was paid by WorkPac by mistake or as consideration which had totally failed.

Key messages

  • WorkPac’s argument ultimately failed due to the way in which its casual employment contracts were drafted and the characterisation of Mr Rossato’s engagements in reality.
  • Employers should assess whether there truly is an absence of a firm advance commitment in respect of its casuals.
  • It is important that employees are correctly engaged either as a casual, part-time or full-time, and that their employment contracts accurately reflect that relationship.
  • However, while the contractual terms are important, the actual conduct of the parties will be taken into account by the relevant court or tribunal in determining whether an employee is truly a casual employee or not.
  • Employment contracts for casual employees should be explicit about the casual loading and the conditions for which it is paid, such as annual leave, personal/carer’s leave, notice of termination, redundancy benefits and the other entitlements of full-time or part-time employment.

The Rossato case may be appealed to the High Court of Australia. Additionally or alternatively, the Commonwealth Government may seek to amend the FW Act or Regulations. However, until any change in the law, employers must observe the law regarding casual employment as it presently stands in Skene and now Rossato.