When a Casual is not a Casual

The Federal Government has flagged potential legislative change as the full Federal Court's Rossato ruling sends "shockwaves" among employers [WorkPac Pty Ltd v Rossato (2020) FCAFC 84]. Some arguing it is untenable for casuals to receive both loading and leave entitlements. 

WorkPac Pty Ltd employed a Mr Rossato between July 2014 and April 2018 and supplied his labour to companies within the Glencore Group. Mr Rossato was employed under six consecutive contracts during this period. 

WorkPac brought an application in the Federal Court and sought declarations that Mr Rossato could not make claims with respect to paid annual, personal/carers and compassionate leave under the National Employment Standards because he was a casual employee within the meaning of ss 86, 95 and 106 of the Fair Work Act 2009 (the FW Act).

In the event that the Court found, contrary to WorkPac’s submissions, that Mr Rossato was not a casual employee, WorkPac sought declarations that it was entitled to restitution of the casual loading which it claimed was included in the hourly rate it had paid to Mr Rossato. It sought that restitution on the basis of mistake and/or partial failure of consideration. 

In the further alternative, WorkPac claimed that in assessing the entitlements that Mr Rossato claimed, it was entitled to bring into account the payments of remuneration that it had made to Mr Rossato on the basis that he was a casual employee. 

WorkPac advanced its claim that Mr Rossato was a casual employee on the basis that a person is a casual when there is an absence of a firm advance commitment as to the duration of the employee’s employment or the days/hours the employee will work.

It argued that the presence or absence of such a commitment was to be determined by reference to the terms of the parties’ written contract of employment and without reference to other materials, including evidence of the way in which the contract was performed in practice.  However, the Court found that the presence or absence of the firm advance commitment may be assessed by regard to the employment contract as a whole, including by considering whether it provided for the employment to be regular or intermittent, whether it permitted the employer to elect whether to offer employment on a particular day, whether it permitted the employee to elect whether to work, and the duration of the employment. 

It has also found that the description given by the parties as to the nature of their relationship is relevant, but not a conclusive consideration. 

In summary the Court has concluded that: 

a) Mr Rossato was not a casual employee for the purposes of the FW Act; 
b) Mr Rossato is entitled to the entitlements that he claimed under the FW Act with respect to paid annual, personal/carer’s and compassionate leave and payment for public holidays; and 
c) WorkPac is not entitled to either restitution or to set off against its liabilities any of the payments made under the six contracts of employment.

Electrical contractors should also take note that the Electrical, Electronic and Communications Contracting Award 2010 provides that a casual employee, other than an irregular casual employee, who has been engaged by a particular employer for a sequence of periods of employment under this Award during a period of six months, thereafter has the right to elect to have their contract of employment converted to full-time or part-time employment if the employment is to continue beyond the conversion process.

Disclaimer: This summary is a guide only and is not legal advice. For more information on employers’ obligations, call NECA Legal (WA) Pty Ltd on 6241 6129 or email necalegalwa@ecawa.org.au