When is a casual worker not a casual worker?

Snedden Hall & Gallop 20 August 2020 12
Snedden Hall & Gallop Senior Associate Emily Shoemark

Snedden Hall & Gallop Senior Associate Emily Shoemark says one of the key issues considered by the court in its decision was whether there was ‘a firm advance commitment’ by the employer. Photo: Region Media.

A groundbreaking decision by the Full Bench of the Federal Court is likely to have significant implications for any employers who engage casuals on a regular and systemic basis.

The decision was handed down on 20 May and considered the issue of whether a long-term casual employee could be entitled to paid leave entitlements available to full-time and permanent part-time staff.

The case, WorkPac Pty Ltd v Rossato [2020] FCAFC 84, involved a claim by an employee, Mr 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 found that, despite the fact that Mr Rossato was engaged under casual employment contracts and received a 25 per cent 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.

Snedden Hall & Gallop Senior Associate Emily Shoemark says 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 where it was determined that a casual employee is an employee who has no firm advance commitment from her or his employer to continuing and indefinite work according to an agreed pattern of work.

“WorkPac argued that Mr Rossato was a casual 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 that the court needed to look at Mr Roassato’s pattern of work, the ‘practical reality and the true nature of the relationship’”, Ms Shoemark said.

The court 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 reduction of that loading against the paid leave owed.

It is not yet known if WorkPac will be appealing the decision.

Ms Shoemark said 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 which may involve regular hours at the request of the client,” Ms Shoemark said.

“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 can also 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 but being paid a casual loading in lieu of paid leave, and then also be provided with those paid leave entitlements,” Ms Shoemark said.

Snedden Hall & Gallop are advising employers who engage casual staff to carefully review their employment practices and consider them in relation to each casual employee.

This decision has highlighted the need for a 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.

Federal Industrial Relations Minister Christian Porter has flagged the impact that the decision is likely to have on business, and has said that the government was open to changing the Fair Work Act.

For more information on Employment Law see Snedden Hall & Gallop.

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12 Responses to When is a casual worker not a casual worker?
Ben Jones Ben Jones 5:35 am 29 May 20

So they are going to give up the 25% additional casual loading also ?

You can’t have both.

    Colin Trinder Colin Trinder 8:46 am 29 May 20

    I agree. But I'd also note that casuals who work for the same employer - such as a labour hire company, for 20 years straight are also clearly permanent employees of that company IMHO. Any other way you slice it is a contrived nonsense. We have the highest rate of workforce casualisation in the world. All the negative social effects can be seen everywhere - housing, health, education. Basically this is a business model predicated on socialising all the long term costs of employing labour and business then expect every taxpayer to stump up to pay the cost while they pocket the profit. The definition of 'casual' is way overdue for review to tighten up on what has become an institutionalised rort.

Brett Sherry Brett Sherry 7:55 pm 28 May 20

I’m a company owner in construction if I can’t have casual workers 10 people will be out of there job. There happy to b casual on higher rate. This will c a lot more people on centre link

    Alireza Mehranfar Alireza Mehranfar 10:59 pm 28 May 20

    And who’s going to do the job for your Company?

    Brett Sherry Brett Sherry 10:31 am 29 May 20

    As a result all casuals will b let go only permanents will stay. The casual people do not want to b permanent

Archie Mac Archie Mac 7:14 am 28 May 20

The amount of young people in Canberra who are given an unpaid ‘trial’ needs to be investigated too

Peter Major Peter Major 8:12 pm 27 May 20

Sounds good, now drop the casual loading that they receive above the award rate to offset forgoing the benefits

David Malcolm David Malcolm 5:42 pm 27 May 20

So where does the ruling leave full time permanent staff who are now effectively 20% underpaid? If the 25% allowance isn't high enough, then the allowance should be raised.

    Warwick Alsop Warwick Alsop 10:38 am 28 May 20

    I don't disagree necessarily, although we do still have a guaranteed full week of work that isn't just cancelled on a whim by our employer.

Ian Lindgren Ian Lindgren 5:26 pm 27 May 20

A very good description of the issue and it is concerning that sham contracts are so widespread even here in the ACT. I'll be holding a Town Hall by Zoom next week for ACT labour hire workers, who themselves are casual employees. The registration details and agenda will be in the RiotACT. This will be on the agenda.

Margreet Philp Margreet Philp 5:25 pm 27 May 20

Alicia Kelly for your mum?

grim123 grim123 12:15 pm 27 May 20

So one person who refuses to accept the terms of the contract he willingly signed, and his team of ambulance chasers, have just made life much more uncertain and difficult for millions of casual workers. Well done.

As a result, no casual job will last longer than 11 months. No casual job will allow the negotiation of regular work days or hours either.

This is a stellar outcome. Just what was needed was to make casual work even more unstable.

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