The High Court of Australia today published its decision in the high profile labour hire firm case WorkPac v Rossato, confirming Rossato was a casual employee under the Fair Work Act.

The decision could impact leave pay for casual workers.

In May 2020, Australia’s Federal Court ruled that Robert Rossato, a casual worker employed by mining labour hire firm WorkPac, was entitled to paid leave. 

WorkPac, employed Robert Rossato as a mine worker at two Queensland mines owned by the Glencore group between July 2014 and April 2018. Rossato was employed under six consecutive contracts during this period.

In December 2020, the High Court of Australia granted WorkPac special leave to appeal the Federal Court decision in an attempt to clarify casual employment.

Now, the High Court unanimously upheld WorkPac’s challenge of the full Federal Court’s decision that Rossato was entitled to paid leave entitlements despite being employed on a series of six contracts, where Rossato was treated as a casual employee receiving casual loading payments in compensation for the lack of employee benefits.

The High Court confirmed that a casual employee has no firm advance commitment as to the duration of their employment, including the days or hours worked, and there is no reciprocal commitment from the employee.

“A mere expectation of continuing employment on a regular and systematic basis is not sufficient for the purposes of the Fair Work Act,” the High Court stated.

According to the High Court, Rossato was expressly engaged on an “assignment-by-assignment basis” and was entitled to accept or reject any offer of assignment. Furthermore, it held that WorkPac was under no obligation to offer further assignments and rostering in advance did not establish a commitment to ongoing employment beyond the completion of each assignment.

Furthermore, the High Court held that where the terms of a written employment contract confirm the nature of an employment relationship (and the parties adhere to those terms), the firm advance commitment must be found in the contract. 

The Sydney Morning Herald reported that the federal government had estimated that if the case had gone the other way it could have cost businesses as much as AUD 40 billion (USD 29.6 million) nationally in back pay without law changes.

Casual workers are typically paid 25% more than permanent staff to compensate for the lack of paid holidays, sick leave and redundancy payments, though that is not always the case in the mining industry where differences in pay deals can mean casual workers receive lower wages than permanent workers.

Major industry associations such as Ai Group, the Australian Chamber of Commerce and Industry, mining group AMMA and WorkPac, all welcomed the decision and cast it as a ‘return to common-sense law’.

Charles Cameron, Chief Executive of the Recruitment, Consulting and Staffing Association, said, “Today’s unanimous decision, by the High Court (WorkPac v Rossato) to respect and validate the decision of Australian workers to work as casual employees is critically important to the long term security of our economy and respects that most Australians are looking to fit work around life, not life around work.  So, stop the 'insecure work' scare campaign and let's get on with working and living the way we, as individuals, decide.”

“The Federal Court of Australia turned casual employment in Australia on its head when it determined that it was OK for a casual employee to double dip by getting a 25% pay loading in lieu of leave entitlements and then asking for paid leave on top,” Cameron said. “This was never what Australia’s workplace laws intended, and it is heartening to see the High Court of Australia put an end to this.”

Meanwhile, The Association of Professional Staffing Companies in Australia published advice for its members following the decision. The trade body advised that its members ensure casual employment contracts expressly state the employment is on a casual basis, that there is no advance commitment of ongoing work, and that casual loading is paid in satisfaction of leave entitlements.

On 27 March 2021 the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2021 came into force. With this Bill, the federal government introduced a new statutory definition (section 15A) of what constitutes a “casual employee”:

• workers who have received an offer of employment on the basis that their “employer makes no firm advance commitment to continuing and indefinite work, according to an agreed pattern of work”; and
• the worker has accepted the offer on those terms and as a result, become an employee.

The Bill also introduces provisions dealing with “double dipping” allowing a court to offset casual loading payments made to a casual employee to compensate them for certain entitlements that they were not eligible for.

“The Bill will assist employers to clarify the status of casual employees going forward but the High Court decision comes as a huge relief to employers of workers classed as casual employees before the Bill came into force”, said Fiona Coombe, SIA Director of Legal and Regulatory Research.