‘Casual chaos’ – Federal Court redefines ‘casual’ employee – the implications for business owners with a casual workforce

Case: WorkPac Pty Ltd v Rossato [2020] FCAFC 84 (‘Rossato’) 

Date of judgement: 20 May 2020 

Background 

The engagement of casual employees has been a hot topic in the employment sector during recent years.  A recent decision of the Full Federal Court leaves employers with a casual workforce open to substantial risk of claims being made by their casual staff for backpay of entitlements and seeking future entitlements previously available only to permanent staff.  

On 20 May 2020, the Full Federal Court handed downs a 272-page decision re-confirmed the previous decision made in WorkPac Pty Ltd v Skene (2018) 264 FCR 536 regarding long-term casual employees entitled to annual leave, compassionate leave, and personal leave. 

In the previous case of WorkPac Pty Ltd v Skene, the Court held that when deciding if an employee is a true casual, they will examine the substance of an employment relationship rather than its form.  

Decision  

In Rossato, the Court held that WorkPac Pty Ltd (WorkPac’s) engagement of Mr Rossato as a casual employee was in fact ‘other than a casual employee’ under ss 86, 95 and 106 of the Fair Work Act 2009 (Cth) (‘Fair Work Act’). Mr Rossato was employed under six separate contract spanning eight years with the company. Each contract regarded him as a casual employee.  

This landmark decision will mean that Mr Rossato is entitled to annual leave, compassionate leave and personal leave and can potentially make a claim for back-pay of these entitlements.  

The Court found that Mr Rossato was employed for an indefinite duration on a stable, regular and predictable basis. In addition, the contracts provided for continuing work to be performed according to an agreed pattern of full-time hours; despite some variability to the actual hours of work allocated, it was nevertheless pre-programmed long in advance and fixed by a roster; and it was implied that Rossato was required to perform the work as allocated to him on the roster and was unable to elect whether to work a shift or not. 

WorkPac argued that Rossato was paid the required 25% casual loading in lieu of permanent employee entitlement sunder the Fair Work Act.  The Court rejected this argument and outlined that the contracts Mr Rossato was employed under was not sufficiently worded to allow for a contractual set-off of payments. The Court’s main reasoning behind this decision was that casual loading could not be used as a substitute for the right to paid leave entitlements. In addition, the relevance of regulation 2.03A of the Fair Work regulation, which would avoid double-dipping of payments, was rejected.  

How can we help? 

It is likely this decision will be appealed. The Commonwealth Attorney-General has indicated the government may intervene, otherwise that the applicable legislation may be amended  to stem the flow of claims from affected casual staff. 

We can assist: 

Employers: To advise on current engagement of your casual staff and drafting of contracts with effective off-set clauses; or to reconsider the engagement of your casual employees in other ways mindful of claim risk. 

Employees: To advise on current engagement with your employer and whether to make a claim.  

If you are a business owner and are unsure as to how to best protect your business or what your responsibilities are in any given situation, please contact our office for further advice.  

If you are a worker and are unsure as to how to best protect your job or your income, please contact our office for further advice. We are offering a special discount for employees during this time. 

Like this article?

Share on facebook
Share on Facebook
Share on twitter
Share on Twitter
Share on linkedin
Share on Linkdin
Share on email
Email it to your friend