WorkPac v Rossato – the death of the ‘long-term casual’
Mark Rinaldi Barrister at Victorian Bar and Senior Fellow at Monash University and Benjamin Willis Employee Relations Advisor at Monash University.
Recently, the issue of what constitutes casual employment has become increasingly litigated. The decision of the Full Court of the Federal Court in WorkPac Pty Ltd v Skene (Skene) in 2018 sparked significant media attention because it challenged the then prevailing view as to what constitutes casual employment. Paul Skene, a long-term casual employee, successfully convinced the Full Court that his work arrangements did not fit the legal definition of “casual”. Rather, he was held to be a permanent employee, and therefore was owed annual leave entitlements.
Skene was a blow to WorkPac and the wider business community. Skene was not sought to be appealed to the High Court, but WorkPac commenced fresh proceedings in the Federal Court in relation to a different employee. In WorkPac Pty Ltd v Rossato (Rossato), WorkPac sought declarations that an employee named Robert Rossato was casual with no paid leave entitlements.
As an alternative, WorkPac argued that if Mr Rossato was not casual, then any additional rate paid to him above the permanent entitlement ought to be “set off” against any amount owed in the form of unpaid leave and public holiday pay. Here, WorkPac relied on common law principles of set off and reg 2.03A of the Fair Work Regulations 2009 (Cth), which had been introduced as a response to Skene.
In May of 2020, WorkPac lost their battle to have Mr Rossato declared a casual employee, with the Full Court of the Federal Court of Australia instead finding Mr Rossato was a permanent employee with the relevant paid leave entitlements. Rossato was a clear attempt by WorkPac to have the issues in Skene reconsidered, with the benefit of different facts and legal arguments.
Defining casual employment
Skene and Rossato are both examples of the problems associated with there being no statutory definition of casual employment in the Fair Work Act 2009 (Cth). Consequently, this remains a matter of common law interpretation. Prior to Skene, it had been commonly believed the designation of an employee as a casual under a modern award, with the payment of a casual loading, meant that the person could be treated as a casual employee for the purposes of the NES.
However, despite the employee in Skene being engaged as a “Casual [Field Team Member]” under the applicable industrial instrument, the Full Court held that neither this title nor the payment of casual loading meant that the employee was a true casual. Instead, the Court focused on the “essence of casualness” as a determinative factor, this being an “absence of a firm commitment as to the duration of the employee’s work” as held in Hamzy v Tricon International Restaurants t/as KFC. In Rossato, the Federal Court again held that a casual employee engaged in regular, systematic, and predictable work was eligible for paid leave entitlements, applying similar reasoning.
The decision in Rossato effectively means that more than 1 million workers previously regarded as casual who have been performing regular shifts rostered in advance could be entitled to annual leave, sick leave, and other entitlements received by permanent employees. Industry groups estimate the judgment could cost $8 billion. WorkPac has sought special leave to appeal to the High Court to challenge the decision made in Rossato.
Similar uncertainty faced employers and employees in the wake of the Mondelez v AMWU decision, which held personal leave is taken by reference to days, rather than normally rostered hours of work. In August, that decision was overturned by the High Court. The same uncertainty exists for the Rossato decision if special leave to appeal is granted. Until the High Court decides on the matter, what constitutes a genuine casual relationship remains uncertain.
Meanwhile, employers have only one viable strategy: reviewing their casual contracts and their working arrangements with a view to ensuring each employee’s stated casual status is appropriate. Letters of variation or offering long-term casuals the opportunity to convert to permanency are also prudent steps to consider as part of this.
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