On 20 May 2020 the Full Bench of the Federal Court handed down the decision of WorkPac Pty Ltd v Rossato  FCAFC 84, which considered the issue of whether a long-term causal employee could be entitled to paid leave entitlements available to full-time and permanent part-time staff.
In this article Emily Shoemark, head of our Employment Law team, gives an overview of the case and explains why this ground-breaking decision is likely to have significant implications for any employers who engage casuals on a regular and systemic basis.
The case involves a claim by an employee, Robert Rossato, who claimed that, despite being engaged under six consecutive casual employment contracts, he was in fact a permanent employee and entitled to the associated employment benefits – including paid annual leave and carers leave.
The Full Bench has found that, despite the fact that Mr Rossato was engaged under casual employment contracts and received a 25% casual loading in lieu of paid leave, the reality of his employment was that he was a permanent employee and entitled to paid leave and payment on public holidays.
One of the key issues considered by the court in its decision was whether there was ‘a firm advance commitment’ by WorkPac to Mr Rossato of his days and hours of work. This test was set by the Full Bench of the Federal Court in the earlier decision of WorkPac v Skene , where it was determined that a casual employee is an employee who has no firm advance commitment from their employer to continuing and indefinite work according to an agreed pattern of work.
WorkPac argued that Mr Rossato was a casual worker because there was no ‘firm advance commitment’ of days or hours of work in his contract. However, the Full bench found that this question was not solely determined by what was written in the contract and, applying Skene, that the court needed to look at Mr Rossato’s pattern of work, the ‘practical reality and the true nature of the relationship’. It found that ‘the parties had agreed on employment of definitive duration which was stable regular and predictable such that the postulated firm advance commitment was evidence in each of his six contracts’.
The Court also found that, even though the casual loading had been paid, the employer was not entitled to any ‘set-off’ of that loading against the paid leave owed. WorkPac, as the employer, was obligated under the Fair Work Act to pay the leave entitlements under the National Employment Standards (NES). Failure to do so would be a breach of the Act and could result in civil penalties being payable. The court made it clear that even if Mr Rossato agreed that his leave had been compensated for by some other payment, an employer cannot contract out of its NES obligations and change the way that leave entitlements are provided.
It is not yet known if WorkPac will be appealing the decision.
There are many employers who engage casuals on a regular and systematic basis for various reasons. This is particularly common in the labour hire industry where employees are casual, but then assigned to placements that may involve regular hours at the request of the client. Once a casual employee has been working on this basis for more than 12 months, they are considered a ‘long-term’ casual employee and under the Fair Work Act some entitlements become available – including the right to make an unfair dismissal claim. Under most awards, those employees also have the request that they be made permanent employees.
This decision further increases the rights of long-term employees, and seemingly allows those employees to ‘double-dip’ their entitlements by being paid a casual loading in lieu of paid leave, and then also be provided with those paid leave entitlements.
Employers who engage casual staff need to carefully review their employment practices and consider in relation to each casual employee:
- What the relevant employment contract says.
- Whether there have been any other discussions with the employee about future work and security of the position.
- Whether they are working regular and systematic shifts – is the employee doing work that is regular, certain, continuing constant and predictable?
- The true nature of the employee’s work – is the way the employee is engaged and works different to that of permanent staff?
- Has the employer made a ‘firm advance commitment’ to the employee about their hours and days of work, and secure employment?
This decision has highlighted the need for review of the Fair Work Act 2009, as for many this decision is at odds with the basis for engaging someone as a casual employee and the purpose of paying a casual loading. Christian Porter, Industrial Relations Minister, has flagged the impact that the decision was likely to have on business, and has said that the government was open to changing the Fair Work Act.
How can we help?
Our Employment Law team can advise on your employment policies and agreements to make sure you have the right policies in place for the right people. Contact them on 02 6285 8000 or by email.
 WorkPac Pty Ltd v Skene  FCAFC 131; (2018) 264 FCR 536
 “Court upholds casuals ‘double dipping’ precedent’, David Marin-Guzman, https://www.afr.com/work-and-careers/workplace/later-court-upholds-casuals-double-dipping-precedent-20200520-p54utr