Hiring casual employees in lieu of permanent staff is a common occurrence in many industries, particularly in labour hire markets. However, the term “Casual Employee” may just be a title on paper, rather than the practical reality of the employment relationship.

In 2020, the Federal Court decision in WorkPac v Rossato has real, practical implications on the nature and utilisation of casual employment within a myriad of industries. In particular, companies have now opted to review current protocols and practices in relation to long term, regular casual workers to include permanent employee entitlements.

Background:

Mr Rossato worked for WorkPac as a casual field team member engaged to work in the mines at Glencore. Since Mr Rossato was a casual employee under the contract, he was ineligible for paid leave entitlements.

Mr Rossato was employed under 6 contracts over the period between 28 July 2014 and 9 April 2018. These contracts required Mr Rossato to work in accordance with a roster pre-programmed in advance, with extraordinarily little power to elect not to undertake a shift. Much of these contracts contemplated the rate of pay as per hour of work and the pay would be on a casual loading basis.

Casual or Permanent Employee?

The court assessed whether the employment had a “Firm Advance Commitment”” as per the contract. The Court considered in its assessment:

• Regular vs Intermittent: The more regular your work hours or days are, the higher the likelihood that you are not a casual employee.
• Certainty & Predictability: The more certainty and predictability your working days/hours, the higher the likelihood that you are not a casual employee. E.g. having the same set roster for months.
• Continuing & Indefinite: Where there is no set time for the expiry of employment, then it is likely to be continuous & indefinite work. A guideline period for the work is not enough to show the work had a defined period.
• Election not to work: If you are unable to cancel shifts without incurring heavy penalties, it is likely that the court will find that attendance was required and thus makes you likely to be a casual employee.
• The hourly rate of pay in itself is not an indication that a person is a casual employee

The Court commented that a person who “Stands and Waits” for work is considered a casual employee. Take for example a person who works only in response to a specific demand over a specific period.

What entitlements are available?

If, like Mr Rossato, you are found not to be a casual employee, then you are entitled to permanent employee entitlements. These include paid annual leave, personal/carer’s leave and leave on public holidays, among others.

These entitlements are in the Fair Work Act and cannot be taken away by terms in the contract.

WorkPac’s Restitution Claim

WorkPac was unable to claim restitution for the casual loading rate as there was no finding of a mistake regarding payments and failure of consideration. This is as Mr Rossato was paid the correct amounts pursuant to the contract as there was no “set off” clauses or restitution clauses regarding casual loading.

Implications for you

If you are an employee in similar circumstances to Mr Rossato, then you are likely entitled to permanent employee entitlements. You are also able to claim unpaid leave entitlements from your employer.

If you are an employer, you may be looking at reviewing and assessing your employee contracts in relation to the considerations of “Firm Advance Commitment” in WorkPac v Rossato. It is vital that employment contracts accurately reflect these arrangements employees have been engaged for. Note that the court will consider the conduct of parties in the relationship, thus it is also vital that the parties’ conduct reflects the arrangements in the employment contract.

The above information is intended as general information and is not intended to be relied on as legal advice. If you are considering making a claim against your employer or if you are looking to review employment contracts, call one of our experienced lawyers now on (02) 9920 1787 to find out how we can assist you. Pannu Lawyers are highly experienced in drafting & reviewing employment contracts as well as resolving civil disputes between employees and employers.