On 4 August 2021 the High Court handed down their much-anticipated appeal decision of WorkPac v Rossato. The High Court ultimately upheld the appeal of labour-hire company, WorkPac, confirming that their former employee, Robert Rossato, was in fact a casual employee and not a permanent employee. The decision comes as welcome news to employers.

The High Court unanimously overturned the May 2020 decision of the Full Federal Court, which had held that Mr Rossato was entitled to paid leave entitlements and public holiday payments as a permanent employee of the company, despite being contracted as a casual worker. 

The High Court based its finding of casual employment on an examination of the enterprise agreement which applied to Mr Rossato, Mr Rossato’s six employment contracts with WorkPac, and the relevant provisions of the Fair Work Act 2009 (Cth) (FW Act).

Previous judicial considerations

Mr Rossato is not the first to bring this issue before the courts. It has been previously established that when determining whether an employee is truly a casual, the express contract terms, work patterns and whether there is a “firm advance commitment as to the duration of the employee’s employment” will be key.

However, before this appeal decision, the Full Federal Court asserted that in characterising the relationship, the courts must have regard to the “entirety of the employment relationship”. On this point, the High Court held that the Full Federal Court had erred. Instead, the character of the employment relationship needed to be determined by evaluating the enforceable terms agreed to at the time of entering the contract.

Contract terms are key

The High Court emphasised the importance of evaluating the employment contract and taking the express terms of the contract for what they are.

According to the judgement, as the employment relationship between WorkPac and Mr Rossato had been committed to a written contract, these written terms needed to be complied with, and this included the intentional lack of mutual commitment to an ongoing position of employment. Mr Rossato’s mere belief that his employment would continue was insufficient to demonstrate an actual firm advance commitment of the duration of his employment by WorkPac.

Each of the contracts Mr Rossato entered into were for a defined term, and WorkPac were therefore under no obligation to continually offer Mr Rossato work assignments and he was under no obligation to accept offered work. As such, Mr Rossato met the definition of a casual employee and was consequently not entitled to paid leave and public holiday payments.

In essence, the Court has confirmed that when disputes as to employment status come before lower courts, they should be prioritising an evaluation of what the parties have formally and explicitly agreed to and, unless legislation conflicts with that agreement, the employment contract should be given effect.

The High Court maintained that neither Mr Rossato nor WorkPac had an established commitment to continuing the employment relationship beyond the completion of each work assignment, despite Mr Rossato’s work rosters evidencing a level of regularity and consistency to his employment. Importantly, the Court clarified that casual work which is regular and systematic is contemplated by the FW Act and therefore acceptable under a casual employment contract.

It was also significant that Mr Rossato was paid an amount of casual loading and that this was emphasised in his contract and the relevant enterprise agreement as a loading paid in lieu of his National Employment Standard entitlements. The High Court determined this was a “compelling indication” that the parties intended him to be a casual employee to whom such benefits were not owed.

Employer takeaways

The High Court has finally provided clarification on the definition of a “casual employee”, holding that there is a necessary requirement for there to be “no firm advanced commitment” to ongoing work. The newly inserted clause 15A of the FW Act, which provides a statutory definition of “casual employee”, replicates some of the High Court’s key determinations made in the decision.

Following this amendment of the FW Act and the High Court’s decision in WorkPac v Rossato, the primacy of the employment contract in determining the nature of casual employment has been reinforced.

The decision also clarified that payment of casual loading in lieu of entitlements is still a strong indicator of casual employment, reducing the risk of “double dipping” claims. Additionally, employers in industries where recurring short term engagements on a casual basis are common can be reassured by the High Court’s finding. A fixed roster, set well in advance, will not provide a commitment to ongoing work, provided the roster is still consistent with the nature of the engagement.

In light of these findings, employers should seek to review their casual employment contracts to ensure that the terms for casual employees support the characterisation of casual employment in the context of the work being performed.

For more information, please see WorkPac v Rossato & Ors [2021] HCA 23 full decision and summary.

To discuss, please contact:

Jasmine O'Brien
Principal
M +61 401 926 108 | T +61 3 9611 0149
E E: jobrien@sladen.com.au