Fair Work Act changes lessen impact but employers should review contracts
A long-running court battle over the question of casual employment status has come to the end of the line with the High Court handing down its decision in WorkPac v Rossato.
The High Court found that Rossato was a casual employee both for purposes of his entitlements under the Fair Work Act’s ‘safety net’, the National Employment Standards, and also under WorkPac’s enterprise agreement.
The High Court’s decision clarifies the common law meaning of a ‘casual employee’, which aligns closely with the definition of a ‘casual employee’ that was inserted in the Fair Work Act in March.
Bristow Legal legal practitioner director Gillian Bristow said the decision may have lost some impact due to subsequent Fair Work Act changes but employers should still check their casual contract offerings.
“The Government moved to provide certainty to employers earlier this year by amending the Fair Work Act to include a definition of casual employment and measures intended to prevent ‘double dipping’ by employees who successfully make a claim for unpaid entitlements,” Bristow said.
“Those changes took effect from 27 March 2021, and while the new definition is intended to apply retrospectively, it does not include employees, like Mr Rossato, whose claims are already before the courts.
“For these reasons the decision is somewhat limited in its significance for employers, but it does provide some reassurance.”
NatRoad had been vocal on the implications of this case
In this case, the court did not need to rule on the ‘double dipping’ question.
Between this and the fact that the new definition of ‘casual employee’ does not apply in this case, the consequences of the decision are not as wide ranging as they might otherwise have been, Bristow said.
“The Court agreed with the various parties to the case that the question of whether an employee was a casual reduced to asking whether there was ‘no firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work’,” she said.
“The phrase itself comes from earlier decisions and was the focus of the previous court, the Full Court of the Federal Court, in making its decision.
“It is also mirrored in the new definition to be found in the Act.”
The High Court found that the lower court was mistaken in finding WorkPac (a labour hire firm) had made such an advance commitment to Rossato in providing him with rosters up to a year in advance.
“The Court took the view that these were WorkPac’s client’s rosters and that Mr Rossato was free to turn down work as he chose.
“More importantly, each ‘assignment’ was the limit to the work agreed between WorkPac and Mr Rossato and there was no further commitment to providing more assignments.
“For this reason, even though the work was regular and systematic, there was no firm commitment to continuing to provide that work.
“The Court pointed out that the Fair Work Act acknowledges that casual employees can have regular work, just as Mr Rossato did.”
The High Court also noted in passing that the lower court was wrong to go to the extent it did in reinterpreting the ‘true’ nature of the contract.
“Where a contract clearly states in writing what the terms of that contract are, courts should be very reluctant to find the true nature of the contract to be different,” Bristow said.
“The Court also noted this was important for providing certainty to the parties at the time of making the contract.
“This remark might be the most significant part of the decision, as it suggests an approach by the High Court to resolving similar issues in ways that will bring certainty to contractual arrangements.
“For that reason, many of us will be looking forward with keen interest to the High Court’s pending decisions in cases concerning the distinction between employees and contractors.”
Although important changes since the High Court agreed to hear this appeal, including the recent amendments to the Fair Work Act, and questions of fact specific to this case, make the outcome less significant than it would have been six months ago, Bristow said it is still noteworthy.
“The main takeaway is that businesses who haven’t already done so in response to the amendments to the Act should ensure that all contracts for casual employment clearly state that the offer does not make any firm advance commitment to continuing and indefinite work according to an agreed pattern.
“Where practical, the contract or letter of offer should also provide as detailed a breakdown as possible of the component of pay that constitutes a casual loading.
“For now, the key point to note is that casual contracts should be carefully checked for the points noted above.
“Make sure the contract states that there is no firm commitment to regular or ongoing work, and make sure that the extra casual pay is clearly identified.”