Post Rosattos – a brave new world
On 20 May 2020, the Full Federal Court handed down its long-awaited decision in WorkPac Pty Ltd v Rossato FCAFC 84.
The Court found that an employee of labour hire business WorkPac Pty Ltd (WorkPac), engaged and paid as a casual was in fact ‘other than a casual employee’ and entitled to annual leave, compassionate leave and personal leave.
From 28 July 2014 to 9 April 2018, Mr Robert Rossato (Rossato) was employed by WorkPac under six consecutive contracts of employment which each labelled his employment as casual. Relying on the decision of Skene, Rossato claimed that despite WorkPac labelling him as a casual, the employment relationship was not that of a casual employee.
WorkPac commenced proceedings in the Federal Court seeking declarations that Rossato was a casual employee and not entitled to paid entitlements under the FW Act or the applicable Enterprise Agreement. In the alternative, it was argued that Rossato’s pay included a casual loading of 25% which was, in part, paid in lieu of entitlements payable to permanent employees under the FW Act and WorkPac was entitled to ‘set off’ any amount owed to Rossato in respect of those entitlements.
The nature of casual employment
The decision reinforced that casual employment is ordinarily indicated by an absence of a ‘firm advance commitment as to the duration of the employee’s employment or the days/hours the employee will work.’
While Rossato was employed and paid as a casual, the way the contracts were actually performed pointed against them being truly casual. The Court found that the parties had agreed to an indefinite employment arrangement which was stable, regular and predictable.
According to the Court, these characteristics indicated a firm advance commitment to ongoing employment. By comparison, casual employment is unpredictable, irregular, intermittent and not pre-allocated.
WorkPac contended that the hourly rate paid to Rossato included a casual loading, which was, in part, paid in lieu of Rossato’s entitlements under the FW Act. WorkPac argued that if Rossato was in fact employed ‘other than a casual,’ it should be able to set off any of his entitlements with payments already made.
The Court rejected this argument.
WorkPac argued that, if Rossato was in fact ‘other than casual’ and entitled to the claimed benefits, it was entitled to restitution of the casual loading paid, or any amount paid in excess of what Rossato would have been paid as a permanent employee under the Enterprise Agreement.
The arguments were unsuccessful.
Key takeaways for employers
Employers should be wary that employment, which is regular, certain, continuing, constant and predictable may be deemed ‘other than casual.’ Employers must consider the real nature of an employee’s work rather than just label it as casual.
Employers should also be wary that paying a casual loading may not, of itself, determine the status of the employment relationship
Read the full case here: http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCAFC/2020/84.html
This article has been prepared by WR Law. The information provided should not be relied upon as legal advice. You should speak with Rosa Raco directly about your specific circumstances via email email@example.com or phone 03 54996131