Federal Court of Australia
WorkPac Pty Ltd v Rossato  FCAFC 84
The Federal Court ruled on Wednesday 20 May that “casual” workers who worked regular and predictable shifts with a firm, advance commitment to work were not casuals despite how they were described in employment contracts and therefore were entitled to be paid annual, sick and carer’s leave.
Background to the Case
Prior to COVID-19, 2.6 million Australian workers were employed as casuals (about a quarter of all employees). They do not receive annual leave, personal leave, notice of termination or redundancy. To make up for that, they are generally entitled to a pay loading or ‘uplift’.
Although the Fair Work Act does not define the term “casual”, casual work is usually thought of as temporary, irregular or uncertain in nature. Last week the Federal Court affirmed previous rulings by deciding it should be given its “general law” meaning, with the “essence of casualness” being the “absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work”.
The Courts Ruling
The Federal Court ruling, against labour-hire company WorkPac, is tied to a 2018 ruling against the same company. That case was brought against WorkPac by fly-in-fly-out worker Paul Skene, who successfully argued his set rosters meant he should be treated as a permanent worker. Rather than appealing that decision to the High Court, WorkPac took the unusual step of funding another former mine worker, Robert Rossato, to pursue similar claims against it for unpaid leave and public holiday pay. It did this to test out some defences it had failed to run in the Skene case.
Under at least one of his contracts, Mr Rossato worked seven days on, seven days off with 12 hour shifts set in advance, which Justice Mordecai Bromberg found pointed to him having work that is “regular, certain, continuing, constant and predictable” and not casual.
WorkPac also argued that even if Rossato was really a permanent worker, it could “set off” the casual loading Rossato had been receiving against the leave entitlements. In other words, if he was entitled to the leave entitlements he claimed, he had already been paid for them. WorkPac claimed he would otherwise be “double-dipping”.
The Federal Court, however, ruled that Rossato, despite having a 25 per cent casual loading built into his wage, still had an entitlement to leave that could not be offset through the wage uplift because it did “not have a close correlation” to the leave entitlements.
It seems highly likely WorkPac and/or the Commonwealth will appeal the Rossato decision to the High Court, and/or seek to change how casual work is defined in the Fair Work Act to prevent so-called “double-dipping” of entitlements.
Implications for Employers
In the meantime, businesses that employ long-term casuals may be worried about the prospect of retrospective claims for unpaid entitlements. This may be overstating the risk, however, given that a previous ruling by the Federal Court in 2019 confirmed that long-term employees with fluctuating patterns of work could be defined as casuals, even if they have an expectation of ongoing employment. If you are or have an employee classified as casual who works regular days and hours over a week or fortnight, you should carefully consider if they would be truly classified as casual in light of the recent cases.
If you think you need some guidance or advice give one of the team at Ezra legal a call.
Call us on 08 8231 6100 or email firstname.lastname@example.org.
We look forward to hearing from you soon.
Michael Fabbro, Principal