High Court Provides Clarity for Casual Employment

The High Court has overturned the Federal Court decisions in the WorkPac v Rossato (see our previous article: 'Proposed Changes to Casual Employment') that found that employees who worked regular and predictable shifts over an extended period were not in fact casual employees.

To refresh your memory on the previous WorkPac decisions, the Federal Court had determined that Mr Rossato had been given regular and ongoing shifts and should have been classified as a permanent worker, not casual, and awarded the associated entitlements including annual leave. This decision caused panic for businesses with fears that it would open the floodgates for claims of unpaid leave, despite casual workers already being paid 25% loading to compensate for entitlements. 

This decision provides clarity to employers who can now be satisfied they have certainty when it comes to their casual employees. The High Court expressly stated that casual employment can be long-term with a casual employee working regular and systematic hours.

It was found by the High Court that for an employee to be “other than” casual, there must exist a firm advance commitment to continuing work unqualified by indicia of irregularity, such as uncertainty, discontinuity, intermittency and unpredictability. A firm advance commitment is an enforceable promise, not an ‘expectation’ of ongoing work. Unlike the Federal Court, the High Court took the view that, where an employee’s contract is wholly in writing the terms of the written agreement are construed to determine whether a firm advance commitment exists, rather than looking to post-contractual conduct.

The High Court specifically considered the following aspects of Mr Rossato’s employment agreement provided that:

1. his hours of work “may vary” and were a “guide only”;
2. that WorkPac was not required to offer him any assignment, and assignments could be accepted or rejected;
3. either party could terminate on an hours’ notice;
4. in some of his contracts, Mr Rossato had the right to refuse or cancel shifts;
5. the payment of casual loading;
6. that the employment was to be on a casual basis; and
7. that any offered assignment could be varied on one hour’s notice.

While Mr Rossato did receive his rosters far in advance, the High Court formed the view that this was of limited significance and did not provide a commitment to an ongoing employment relationship. In fact, based on the Agreement, it was clear that WorkPac had avoided making a firm advance commitment to ongoing employment.

What Does This Mean For Employers?

While this decision provides some certainty for employers, it is as important as ever for employers to review any employment agreements to ensure that employment agreements reflect a true casual engagement and that the terms are consistent with the recently introduced definition of “casual employee” in the Fair Work Act 2009 (Cth).

If you’re wanting to have a chat about casual employees and whether your current agreements are up to scratch, contact our dedicated Workplace Relations team today:

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