High Court’s decision on Casual Employment,
how protected are you?
A small gap in your contract can sometimes cost you big
Mr Rossato, a casual employee in WorkPac, who had six contracts/assignments, on his retirement claimed to WorkPac for untaken annual leave, public holidays, personal and compassionate leave. He also mentioned that these entitlements were 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.
He took them to the court. The Full Court of the Federal Court of Australia (FCFCA) On 2 June 2020 found that Mr Rossato, who was labelled 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 concern for the employer with regards to the status of employees and their ability to claim entitlements such as annual leave, public holidays, personal leave and compassionate leave.
For Fair Work Act and Enterprise Agreement the high Court was required to consider whether Mr Rossato was a Casual employee.
The High Court, on August 4th, 2021 ruled that Mr. Rossato was a casual mining worker and was not entitled to backpay and leave entitlements.
The High Court Decision
The ruling influenced elements of the federal government’s 2021 industrial relations reforms, which slotted a definition of casual work into the Fair Work Act.
Most of the employers were relieved after the High Court Overturned the ruling which critics feared would compel a business to pay billions of dollars in backpay to casual workers.
Casual Employment in Australia
Over the past 20 years in Australia, around 20% of the workforce are engaged as casuals, with the high court decision in the Rossato case gives a clear picture to the contract of employment in defining the nature of employment. The High Court decision is in line with the Fair Work amendments.
Full-time or part-time employees do have an advance commitment to ongoing employment. They are expected to work regular hours every week and, they are entitled to paid leave. A regular employee should also receive advance notice for the end of employment.
The Fair Work Act defines casual employment – if the employee accepts a job offer from an employer knowing there is no firm advance commitment to ongoing work with an agreed pattern of work. However, under awards and agreements, a casual employee is paid a casual loading- which means a higher pay rate for being a casual employee.
Employers should continue to review their casual employment contract and it must be aligned with the new definition of “casual employee”. They need to outline terms and conditions for casual employees in a written employment contract that confirms the casual nature of the relationship, it should include payment of casual loading, and does not firmly commit to the provision of ongoing and indefinite work.
In the written contract the following factors need to be considered
- An employer can choose to offer work and it is the employee choice whether to work or not.
- an employee will be offered work only if the employer needs the work.
- the ability of the employee to accept or decline work offered to them.
- the work is described as casual employment.; and
- an employee will be paid a casual loading or a specific pay rate. A regular pattern of work does not automatically mean is permanent(full-time/part-time) work.
- Employers should also review past offers of employment that have been made and accepted by casuals to determine if the above factors are sufficiently addressed.
- Casual employees must be engaged in line with the requirements of the Fair Work Act.
The HCA’s unanimous decision in Rossato Vs WorkPac case:
- On Subsequent completion of each assignment, there was no “mutual commitment” in the contractual arrangement between WorkPac and Mr Russotto. As such, any commitment to further work needed to be accounted for in an enforceable agreement.
- Maintaining an ‘expectation of continuing employment’ without an official document 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 since he 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.
- An effectively written contract between the employer and the casual employee should be Mandatory.
- It also clarifies the entitlements of casual Loading is still a strong indicator of casual employment thus reducing the risk of “double-dipping”.
- For casual employees, it will be reassured that for recurring short term engagements ongoing work fixed roaster will be set in advance.
*NETCorp is not an accounting firm, HR specialist, or financial advisors and therefore we encourage you to do your on fact finding research