On 4 August 2021 the High Court of Australia delivered its long-anticipated judgment in WorkPac Pty Ltd v Rossato [2021] HCA 23, unanimously finding that casual employment is characterised by no firm advance commitment as to duration or hours of work, with particular emphasis on the contractual arrangements between the parties.
Background
Mr Rossato was engaged pursuant to six contracts of employment over the period of 28 July 2014 until 9 April 2018. WorkPac hired Mr Rossato out to Glencore Australia Pty Ltd to work in its mines throughout his employment. Glencore rostered Mr Rossato to work alongside its permanent employees and other labour-hire employees and Mr Rossato had little time off during his engagement. Mr Rossato was provided with Glencore’s rosters that set out up to a years’ worth of shifts. Mr Rossato worked on a drive-in, drive-out basis and was provided with accommodation by Glencore during each block of rostered shifts.
Mr Rossato’s employment contracts all differed slightly and included different rates of pay. The first three contracts were largely the same, they all contained an estimated length of assignment as a guide (6 months in two contracts and 154 days in one contract) and they contained a 6 month qualifying period. The contracts also had references to Mr Rossato working in accordance with the relevant Glencore rosters. The fourth, fifth and sixth contracts differed from the first three but were similar to each other. They did not contain a ‘length of assignment’ clause and they stated that Mr Rossato was engaged on a casual assignment and could refuse and cancel shifts.
Decisions of the Full Bench of the Federal Court
In the Federal Court’s earlier decision in WorkPac Pty Ltd v Skene in 2018 (Skene), the Court held that a casual employee who worked regular and predictable shifts with rosters scheduled for months in advance was not a true casual, and was entitled to benefits ordinarily payable to permanent employees under the National Employment Standards. We published an article about that decision which can be found here.
In reliance on this decision, Mr Rossato sought to be paid for various entitlements such as annual leave and public holidays, claiming that he was in fact a permanent employee, despite being labelled as casual. Last year in WorkPac Pty Ltd v Rossato [2020] FCAFC 84, the Federal Court found against WorkPac, and suggested that the proper classification of an employee required an assessment of the conduct of the parties and the “real substance, practical reality and true nature” of the employment relationship. Our article about that decision can be found here.
High Court’s reasoning
WorkPac was granted special leave to appeal the Full Court decision to the High Court. In its decision, the High Court overturned the Federal Court’s decision.
The High Court found that an engagement should be characterised as casual employment if there was no “firm advance commitment” to ongoing work in the enforceable contractual terms. Where such a contract exists, the parties’ understandings or expectations about the employment relationship, including how the employee is actually engaged or works on a day to day basis, should not be considered.
The High Court rejected the approaches of the Full Court in the first instance decision as well as the decision in Skene. The High Court found that the correct characterisation of the employment relationship depended on the terms of the applicable written employment contract.
In deciding that Mr Rossato was a casual, the High Court took into consideration the following terms of his contract:
- the employment contract provided that the employment was on an assignment-by-assignment basis, each one representing a discrete period of employment;
- Mr Rossato was free to accept or reject assignments and WorkPac had no obligation to offer further work on the completion of an assignment;
- assignments could be varied or terminated with one hours’ notice;
- the employment contract specified daily working hours as a guide which could be varied; and
- there was an express reference to payment of a casual loading and a casual rate of pay.
Notably, the High Court found that Mr Rossato was a casual employee even though he had a regular and systematic roster, finding that this was entirely consistent with the concept of casual employment in the Fair Work Act 2009 (Cth). Ultimately, there was found to be no “firm advance commitment” to ongoing work, and therefore the employment relationship was properly deemed as casual.
Interaction with Fair Work Act
The High Court’s decision follows recent changes to the Act, including the insertion of a definition of casual employment, we published an article on this available here. While the High Court’s decision was consistent with that definition, the judgment did not turn on it because the new provisions did not apply to this case.
Whilst the decision brings more clarity to employers, employers should seek advice when considering offering and renewing casual employment contracts to ensure that the terms of the employment contract accurately reflect the intention of the parties. You should also check any enterprise agreement and/or the relevant award.
How we can help
Please contact Russell Kennedy’s Workplace Relations, Employment and Safety Team for advice regarding employment of casual employees.
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