If it’s in writing, you’re a casual: WorkPac Pty Ltd v Rossato provides clarity

In recent years, the question of what constitutes casual employment has been relatively uncertain, sparking increased litigation. In particular, recent Federal Court decisions of WorkPac Pty Ltd v Skene [2018] FCAFC 131 and WorkPac Pty Ltd v Rossato [2020] FCAFC 84 which adopted a holistic approach to determine the true nature of an employment relationship, rather than simply relying upon written contract terms.

Today, the High Court of Australia (HCA) unanimously overturned the latter Full Federal Court decision and provided (very welcomed) clarity on what constitutes casual employment at common law (see WorkPac Pty Ltd v Rossato [2021] HCA 23).

Previously, the Full Federal Court of Australia had ruled that Mr Rossato – notwithstanding his six casual contracts of employment – was a permanent employee because of his regular, ongoing shifts whereby he worked a roster of seven days on, seven days off, set by rosters some seven months in advance, leading to an entitlement to associated benefits of a permanent employee such as leave entitlements.

The HCA however disagreed with the Federal Court’s approach. The HCA instead found that WorkPac employed Mr Rossato on an “assignment-by-assignment basis”, which he could accept or reject. After each assignment was completed, WorkPac had no obligation to offer Mr Rossato further work. Mr Rossato therefore could not establish a commitment to a continuing employment relationship necessary for permanency when each assignment ended.

A (somewhat) new definition

According to the HCA, a "casual employee" is an employee who has “no firm advance commitment” from the employer as to the duration of the employee's employment or the days or hours that the employee will work, and provides no reciprocal commitment to the employer.

Where an employer and employee commit the terms of the employment relationship to a written contract and then adhere to those terms, the required “firm advance commitment” will be found in the binding contractual obligations of the parties.

Removing any ambiguity caused by the WorkPac v Skene decision, the HCA clarified that a mere expectation of continuing employment on a regular and systematic basis, is not enough to distinguish the employment relationship.

Moving forward

The HCA’s decision clarifies the common law meaning of a ‘casual employee’, which aligns with the new definition of a ‘casual employee’ that was inserted into the Fair Work Act in March 2021. For further information see, ‘We can keep things casual: New casual employee laws enacted in Australia’.
It turns the focus on the terms of the engagement. Accordingly, employers who enter into a contract with an employee confirming the casual nature of the employment, can (subject to complying with those terms) rely upon the contract as evidence that the relationship is in fact casual even if it may be of a long and regular duration.

Please do not hesitate to reach out to our team who would be more than happy to discuss this decision with you.