High Court overturns Rossato ruling

When WorkPac Pty Ltd (WorkPac) appealed to the High Court of Australia, it sought to reverse the Full Federal Court’s Rossato decision that opened the way for casuals to claim leave entitlements. Employers warned this could cost more than $14 billion, a figure the Morrison Government later revised to between $18 billion and $39 billion.

Mr Rossato and others have been embroiled in litigation against WorkPac for some time.

The initial claim calling into question the nature of engagement, i.e. permanent versus casual status of employment, was brought by WorkPac employee, Mr Skene, against WorkPac Pty Ltd, a labour-hire company in 2018. In that case, the Federal Circuit Court of Australia decided in Mr. Skene’s favour that he was a permanent employee and not a casual employee. WorkPac appealed this decision and the Federal Court of Australia upheld the decision of the lower court, the FCCA, that Mr Skene was not a casual employee.

Similar circumstances applied to Mr. Rossato as applied to Mr. Skene. Mr. Rossato, too, then brought proceedings against WorkPac.

Mr Rossato was employed as a production worker by Workpac, appellant labour –hire company under a series of six contracts or ’assignments’ to perform work for one of Workpac’s clients, in effect a host employer.

Workpac regarded Mr Rossato to be a casual employee. He was not paid leave and public holiday entitlements that permanent employees would receive under the Fair Work Act and the enterprise agreement (agreement between a collective group of employees and an employer) which governed his employment.

WorkPac questioned this decision and in doing so, brought proceedings in the Federal Court seeking declarations Mr Rossato had been a casual employee for the purposes of the Fair Work Act and applicable enterprise agreement.

WorkPac claimed the payments it had made to Mr Rossato should be acknowledged and taken into account should the Court find that WorkPac owed Mr Rossato outstanding entitlements.

WorkPac suffered a similar fate in the case brought against it by Mr Rossato as it had in the case brought by Mr Skene. The Full Court concluded Mr Rossato was not a casual employee for the purposes of the Act and enterprise agreement and was entitled to the payments he claimed. The Full Court did not acknowledge the payments already made by WorkPac to Mr Rossato as in anyway partly or fully satisfying its obligations to make full payment to Mr Rossato.

WorkPac then appealed to the High Court and centered its argument on the nature of casual employment. The High Court held that a ’casual employee’ is an employee who has no firm advance commitment from the employer as to how long their employment will last or the days or hours the employee will work and similarly, the employee makes no commitment to the employer.

The High Court held in WorkPac’s favour, that Mr Rossato was a casual employee for the purposes of the Fair Work Act.

If a casual employee is engaged on a “regular and systematic” basis, this alone will not be enough for the employment to be correctly characterised as permanent employment. The Full Court had previously placed great weight on the rostering arrangement, specifically an established shift structure fixed long in advance.

The High Court dismissed the importance of this, and found it did not establish a commitment to an ongoing employment relationship beyond the completion of each assignment.

More importantly, Mr Rossato’s employment was expressly on an ‘assignment-by-assignment basis’ where he was able to accept or reject his employer’s offer of an assignment. Further, after each assignment that Rossato had completed, WorkPac had no obligation to offer him another one.

What this means for employers is that the contract is crucial should the question of casual or permanent employment raise its ugly head.

A Court will make a decision as to the nature of the employment based on the terms within the contract. An employee will be considered casual where those terms do not reflect a ‘firm advance commitment’ to ongoing employment.