The High Court of Australia has unanimously upheld an appeal from recruitment company WorkPac against a 2020 Federal Court decision, ruling that WorkPac’s former employee, Robert Rossato, was in fact classed as a casual employee at law.
In May 2020, the Full Federal Court ruled that casual employees who work stable, regular hours with “predictable periods of working time” should be entitled to collect compassionate leave, personal leave and payments on public holidays.
The decision left employers of casual workers across the country fearing they could be liable for back payments of leave, with estimates suggesting claims could total more than $14 billion.
It also opened up the potential for so-called “double dipping”, whereby an employee could collect payment for leave entitlements in addition to the 25 per cent casual loading already meant to compensate for such benefits.
An amendment to the Fair Work Act, passed in March of this year, already served to clarify casual employees’ rights for ongoing employment and provided limited liability for employers on paying benefits such as casual leave loadings.
Without the amendment, the legal implications of the High Court’s recent decision would have had a high cost for Australian employers.
According to Australian Business Lawyers and Advisors (ABLA), there are still several useful takeaways from the judgment of which employers should be aware.
- A key feature of casual employment is the absence of a firm advance commitment of ongoing employment. This is a reasonably high threshold.
- A firm advance commitment is different to a reasonable expectation of continuing employment. The latter isn’t inconsistent with casual employment, and is in fact recognised as a feature of casual employment elsewhere in the FW Act; for example, in respect of requests for flexible working arrangements under the NES and the qualifying period for unfair dismissal eligibility.
- An employee’s contract of employment will be integral in determining whether a firm advance commitment exists. In departing from the approach taken by the FCA, the High Court found it was inappropriate to place greater emphasis on “unenforceable expectations or understandings” which might have developed on behalf of either party during the relationship, than express contractual terms.
- Characteristics of the employment relationship — like working in accordance with a roster — might foster a sense of regularity and consistency in the relationship, but won’t override relevant contractual terms. In this case, the contract committed each party only for the duration of each “assignment”; the provision of a roster covering a longer period was no guarantee that any future assignments would actually be worked.
- Provided the contract doesn’t contain terms which give rise to a firm advance commitment, it will be determinative in characterising the relationship as casual.
ABLA advises that though the legal position has been settled from both a legislative and common law perspective, employers should still protect themselves with a written contract that clearly designates casual employees as such and specifies the payment arrangements, including the fact that casual loading is payable.