Employers will celebrate landmark High Court decision on casual employment
On Wednesday 4 August the High Court upheld the appeal of labour-hire company, WorkPac, in a decision which will come as welcome news to employers.
The Court unanimously overturned the May 2020 decision of the Full Court of the Federal Court which had held that an employee of WorkPac, Robert Rossato, was entitled to paid leave entitlements and public holiday payments as a permanent employee of the company, despite being contracted as a casual worker.
The High Court based its finding of causal employment under both the enterprise agreement for which Mr Rosatto’s six casual contracts with WorkPac were created, as well as relying on provisions of the Fair Work Act 2009 (Cth) (FW Act).
This is not the first case that has come before the courts where an employee has challenged their contractor status. There are multitude of factors that are looked at to determine whether an employee is truly a casual, including express contract terms, patterns of work and the statutory definition of a casual employee.
The High Court emphasised the importance of evaluating the employment contract and taking the express terms of the contract for what they are. According to the judgement, as the employment relationship between WorkPac and Mr Rosatto had been committed to a written contract, it need be complied with- including the intentional lack of mutual commitment to an ongoing position of employment. WorkPac were under no obligation to continually offer Mr Rosatto work assignments, and he was under no obligation to accept offered work. As such, Mr Rosatto met the definition of a casual employee and was consequentially not entitled to paid leave and public holiday payment requirements.
In essence, the Court has confirmed that when disputes as to employment status come before lower courts, they should be prioritising an evaluation of what the parties have formally and explicitly agreed and unless legislation conflicts with that agreement, then the casual employment contract should be given effect.
The Court said its duty is to "insist upon binding contractual promises as reliable indicators of the true character of the employment relationship is to recognise that it is the function of the courts to enforce legal obligations” and not to establish a new employment relationship based on industrial differences.
The High Court maintained that neither Mr Rosatto nor WorkPac had an established commitment to continuing the employment relationship beyond the completion of each work assignment, despite his work rosters evidencing a level of regularity and consistency to his employment. Therefore, although Mr Rosatto held a belief that his employment would continue on a regular basis, the Court regarded this to be a mere expectation not sufficient for the purposes of the FW Act.
Importantly, the High Court finally provided clarification on the definition of a ‘casual employee’ holding that there was a necessary requirement for there to be “no firm advanced commitment” to ongoing work by either party.
Implications of the decision are far spread for casual workers and employers across multiple industries. In particular for gig economy workers such as rideshare drivers and food delivery app drivers, whose employment status has been a hot topic in Courts in recent years. Given this important High Court decision and the recent amendments to the FW Act in which a new definition of “casual employee” was inserted, it is essential for employers to review their casual employment contracts.
If you have any queries about how these changes may impact you or your business, contact our Employment Law team.
Natasha Vassallo
Graduate Lawyer
T 03 5225 5237
E nvassallo@ha.legal
Jim Rutherford
Principal Lawyer
T 03 5226 8579
E jrutherford@ha.legal
