Back in August 2018, the now infamous Workpac v Skene case (Skene) dropped a bombshell on the widely held understanding of what it means to be a casual employee – that is, you get paid more money (casual loading) in exchange for certain entitlements afforded to your permanently employed compadres. The Federal Court of Australia (FCA) held an employee engaged as a casual was in fact not a casual despite receiving a payment of casual loading due to certain aspects of his employment which were more indicative of a permanent employee. For a comprehensive look at Skene we encourage you to read our article drafted at the time (Workpac v Skene).
Recently, the FCA has doubled down on those principles in a long-awaited decision of Workpac v Rossato[1] (Decision) which, somewhat ironically, also involves WorkPac. Once again, the case involved a FIFO worker (Mr Rossato) engaged on a “casual” basis who was claiming for leave entitlements that were expressly excluded from the terms of his employment (or so Workpac argued). Employers and industry advocates have been hoping the Decision would take a backwards step from Skene or at the very least provide some clarity on the issue of how a casual should be engaged so as not to present a risk of an employee receiving the benefit of casual loading before circling back with a hand out for leave entitlements – which was referred to in Skene as “double dipping”.
The Decision didn’t exactly provide the outcome desired by many employers. The key findings of the decision were as follows:
- Mr Rossato was held to be ‘other than a casual employee’ for the purposes of the Fair Work Act 2009 (Act) because among other things, a “firm advance commitment” existed in the implied terms of his engagement.
- Mr Rossato is entitled to the relevant entitlements he was claiming under the Act; and
- WorkPac is not entitled to “set off’ any amounts of casual loading paid to Mr Rossato against the leave entitlements now payable pursuant to the Decision.
‘Other than Casual Employees’
The National Employment Standards (NES) contained in the Act bestow a minimum set of entitlements on employees including the right to annual leave, personal leave, and amounts of paid compassionate leave. Because casual workers are paid a casual loading in lieu of those entitlements relevant sections of the Act provide the benefit to employees ‘other than for casual employees’. As we will discuss further, the FCA held Mr Rossata to be ‘other than a casual employee’ and therefore entitled to benefit from the relevant terms of the NES as follows:
“In his employment under each of the contracts, Mr Rossato was other than a casual employee for the purposes of ss 86, 95 and 106 of the FW Act and was a “Permanent FTM” and not a “Casual Field Team Member” for the purposes of the 2012 EA”
The FCA accepted the definition of a casual employee provided in Skene as being an employee who has no “firm advance commitment” from her or his employer to continuing and indefinite work according to an agreed pattern of work. On that basis, the FCA considered the terms of the employment when read at the outset of engagement in addition to the surrounding circumstances.
For anyone interested in reading the Decision we encourage you to do so however, we caution that it is extremely lengthy, which can be explained in part by the fact Mr Rossato entered into six (6) employment contracts during the course of his engagement. Accordingly, the FCA had to consider each contract and determine the differences between them. Each employment contract sought in varying degrees to establish the absence of a “firm advance commitment” which sought to establish the engagement was intended to be on a casual basis.
That said, even with the presence of an express term prescribing casual engagement, the FCA found sufficient evidence to suggest a “firm advance commitment” to continuing and indefinite work existed. The FCA considered that “there is a fundamental difference between regular employment and irregular employment. In terms of periods of working time, regular employment consists of predictable periods of working time and provides substantial certainty that the work will be both available to be performed and will be performed during the designated periods. Irregular work provides neither predictability nor certainty.” In determining if Mr Rossato was engaged in work that was regular and predictable, the FCA had regard to relevant factors included but not limited to the existence of rosters scheduled and fights booked months in advance in similar circumstances to Skene.
Mr Rossato was held not to be a casual worker under his employment contracts which therefore made him a ‘other than a casual employee’ for the purposes of sections 86, 95 and 106 of the Act (relating respectively to paid annual leave, personal carer’s leave, and payment for compassionate leave). In this regard, Mr Rossato was entitled to receive these entitlements
Further, Mr Rossato and Workpac were party to an enterprise agreement (EA) which Workpac also attempted to rely on during the proceedings in terms of establishing a basis of casual engagement. There were multiple ambiguities and inconsistencies with the terms of the EA and the FCA relevantly found Workpac had not sufficiently classified Mr Rossato as a casual worker. For various reasons, too extensive to discuss here, the FCA identified Mr Rossato as being a “Permanent FTM” and not a “casual Field Team Member” for the purposes of the EA.
Takeaways for Employers
Whilst the Decision is not exactly what most employers and industry advocates were hoping for, we find it prudent to remind ourselves of the different and some would say (unique to its design) circumstances of this Decision and that of Skene. That being;
- Both employees were employed on a FIFO (fly in fly out workers) basis.
- Due to the nature of FIFO work, both employees were provided a roster and had flights booked months in advance. This “firm advance commitment” could be derived from the planned work in addition to other post contractual conduct of the parties leading to the implication the employees could not be casual employees. In Skene for example the employee had their own designated quarters every time they arrived on site.
- The employment contracts of both employees contained terms which were inconsistent with the ‘essence’ of casual employment which included in some instances the ability for Workpac to seek damages for failed performance by the employee.
- The enterprise agreement both employees were a party to was ambiguous and contained inconsistencies to the extent the FCA identified the employees were actually (albeit unintentionally) classified as permanent workers by Workpac.
The above list is not exhaustive but goes to show how the circumstances of the employees were fairly exceptional in comparison to your average casual worker found at your local newsagency, fish and chip shop, retail, manufacturing plant, club, bar, cleaner, administration staff member or in the office – who has the ability to walk out of that “workplace” at any time without any implications (to a large extent).
Of course , relevantly, those who are in labour hire or engage labour hire employees need to really take note of these decisions.
That said, the decision demonstrates that employers cannot hide behind an express clause conveying casual employment if the remainder of the contractual terms (including the implied terms discerned from surrounding conduct) are more indicative of a permanent engagement. In this regard, currently there may not be a black and white answer (and there may well be an appeal or even intervention by the Federal Government to provide further clarity) but employers can protect themselves by:
- Seeking legal advice in regard to ‘high risk’ employees being those who work a regular pattern of hours;
- Off set clauses may be still implemented but advice will be required to ensure it’s implementation avoids unnecessary legal risk;
- Converting any casual employees to a permanent basis (part time or even full time) where necessary to mitigate the risk of “double dipping”;
- Seek legal advice in terms of a review of all relevant employment instruments to ensure the terms are consistent with casual engagement – and further ensure that the employee is properly classified in the first place.
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Written By
Jonathan
Mamaril
Director
NB Lawyers –
Lawyers for Employers
About the Author
Jonathan
Mamaril leads a team of handpicked
experts in the areas of employment law and commercial law who focus on
educating clients to avoid headaches, provide advice on issues before they
fester and when action needs to be taken and there is a problem mitigate risk
and liability. With a core value of
helping first and providing practical advice, Jonathan is a sought after
advisor to a number of Employers and as a speaker for forums and seminars where
his expertise is invaluable as a leader in this area as a lawyer for employers.
[1] WorkPac Pty Ltd v Rossato [2020] FCAFC 84.