well-drafted agreements fundamental when employing casual workers
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The High Court of Australia has confirmed the importance of properly drafted employment agreements for establishing casual employment status.
The Full Federal Court of Australia in the decision of WorkPac Pty Ltd v Skene1 had determined that Mr Skene was not considered a casual employee. That decision led another employee of WorkPac, Mr Rossato, to notify his employer that he believed he was mischaracterised as a casual employee and entitled to various payments, including for annual leave, personal/carer’s leave, compassionate leave, and public holidays.
WorkPac made an application to the Full Federal Court, seeking declarations that Mr Rossato was a casual employee and therefore not entitled to such payments. WorkPac sought, in the alternative, to have the casual loading he had received set-off against his claim or restitution with respect to such payments made to him.
court initially finds employee not a casual
In the first instance, the Full Federal Court found2that Mr Rossato was not a casual employee, and made declarations that he was entitled to the payments he claimed. The Court also rejected WorkPac’s set-off and restitution arguments.
workpac’s appeal
WorkPac appealed to the High Court of Australia3. Among other things, WorkPac submitted that the Full Federal Court had erred in finding that Mr Rossato was not a casual employee.
The High Court upheld the appeal, finding that the contractual arrangements between WorkPac and Mr Rossato did not include a mutual firm advance commitment to “an ongoing working relationship between them after the completion of each assignment”. This was despite Mr Rossato working a consistent shift structure with rosters set well in advance. Importantly, however, there was no obligation on WorkPac to continue offering assignments and no obligation on Mr Rossato to accept or reject them.
high court clarifies casual employment test
The High Court found that:
- where parties commit the terms of their employment relationship to a written contract and then adhere to those terms, any requisite firm advance commitment is to be found in the binding contractual obligations;
- a mere expectation of continuing employment on a regular and systematic basis is insufficient to establish such a firm advance commitment.
what does the high court decision mean for employers?
This landmark decision by the High Court, together with recent amendments to the Fair Work Act 2009 (Cth) regarding casual employment, provide clarity for employers following the uncertainty created by the Skene and initial Rossato decisions.
It is now clear that a well-drafted employment agreement will be fundamental in determining a casual employment relationship.
Further, employing casuals on a regular and systematic basis is not inconsistent with casual employment, as long as there is no firm advance commitment as to the duration of employment or times of work.
If you would like your casual employment agreements updated in view of these recent developments, please contact our Employment, Safety and Migration team.
1 WorkPac Pty Ltd v Skene [2018] FCAFC 13.
2 WorkPac Pty Ltd v Rossato [2020] FCAFC 84.
3 Workpac v Rossato & Ors [2021] HCA 23.
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well-drafted agreements fundamental when employing casual workers
The High Court of Australia has confirmed the importance of properly drafted employment agreements for establishing casual employment status.
The Full Federal Court of Australia in the decision of WorkPac Pty Ltd v Skene1 had determined that Mr Skene was not considered a casual employee. That decision led another employee of WorkPac, Mr Rossato, to notify his employer that he believed he was mischaracterised as a casual employee and entitled to various payments, including for annual leave, personal/carer’s leave, compassionate leave, and public holidays.
WorkPac made an application to the Full Federal Court, seeking declarations that Mr Rossato was a casual employee and therefore not entitled to such payments. WorkPac sought, in the alternative, to have the casual loading he had received set-off against his claim or restitution with respect to such payments made to him.
court initially finds employee not a casual
In the first instance, the Full Federal Court found2that Mr Rossato was not a casual employee, and made declarations that he was entitled to the payments he claimed. The Court also rejected WorkPac’s set-off and restitution arguments.
workpac’s appeal
WorkPac appealed to the High Court of Australia3. Among other things, WorkPac submitted that the Full Federal Court had erred in finding that Mr Rossato was not a casual employee.
The High Court upheld the appeal, finding that the contractual arrangements between WorkPac and Mr Rossato did not include a mutual firm advance commitment to “an ongoing working relationship between them after the completion of each assignment”. This was despite Mr Rossato working a consistent shift structure with rosters set well in advance. Importantly, however, there was no obligation on WorkPac to continue offering assignments and no obligation on Mr Rossato to accept or reject them.
high court clarifies casual employment test
The High Court found that:
- where parties commit the terms of their employment relationship to a written contract and then adhere to those terms, any requisite firm advance commitment is to be found in the binding contractual obligations;
- a mere expectation of continuing employment on a regular and systematic basis is insufficient to establish such a firm advance commitment.
what does the high court decision mean for employers?
This landmark decision by the High Court, together with recent amendments to the Fair Work Act 2009 (Cth) regarding casual employment, provide clarity for employers following the uncertainty created by the Skene and initial Rossato decisions.
It is now clear that a well-drafted employment agreement will be fundamental in determining a casual employment relationship.
Further, employing casuals on a regular and systematic basis is not inconsistent with casual employment, as long as there is no firm advance commitment as to the duration of employment or times of work.
If you would like your casual employment agreements updated in view of these recent developments, please contact our Employment, Safety and Migration team.
1 WorkPac Pty Ltd v Skene [2018] FCAFC 13.
2 WorkPac Pty Ltd v Rossato [2020] FCAFC 84.
3 Workpac v Rossato & Ors [2021] HCA 23.