Federal Court decision on “permanent casuals”
Article By: Joey Tass, Lawyer Cappello Rowe Lawyers Sydney
The Full Federal Court has handed down its decision in the case of WorkPac Pty Ltd v Rossato  FCAFC 84 which found that Mr Rossato was entitled to be paid annual, personal and compassionate leave as well as payment for public holidays even though he was a casual worker and had already been paid casual loading throughout his employment.
The decision handed in this instance is the same outcome reached in the decision of WorkPac Pty Ltd v Skene  FCAFC, where in that case the Full Federal Court found that a casual labour hire worker was an employee and entitled to leave payments under the National Employment Standards (NES) in the Fair Work Act 2009 (Cth) (FWA). Rather than WorkPac appealing the Skene decision, they opted to commence the Rossato case to have the law in this area reconsidered with the benefit of different facts and legal arguments, although WorkPac were again unsuccessful in this attempt.
Mr Rossato was employed as a coal mining worker by WorkPac, a labour hire firm as a permanent casual for a period of approximately 3 and a half years, and under 6 consecutive employment contract. Despite being engaged as a casual, Mr Rossato worked regular and predictable shifts with a firm advanced commitment as to the duration or the days/hours worked. In late 2018, following the Skene decision, Mr Rossato sought payment of his leave entitlements claiming he was not a casual employee and therefore entitled to leave payments pursuant to the FWA as well as his Enterprise Agreement. WorkPac considered Mr Rossato as a casual employee and not entitled to the amounts claimed. WorkPac subsequently commenced proceedings seeking amongst other things, that Mr Rossato was classified as a casual and not entitled to leave entitlements under the FWA.
Federal Courts findings
In considering the factual matrix, the Full Federal Court determined that the parties had agreed on employment where the work structure provided was continuous, stable, regular and predictable. It found that Mr Rossato was not a casual worker irrespective of what his contract of employment stated and held that:
- Mr Rossato was entitled to be paid his leave entitlements and public holidays;
- WorkPac could not ‘set off’ Mr Rossato’s higher casual rate paid against its liabilities in relation to leave entitlements; and
- WorkPac was not entitled to restitution for any amount paid to Mr Rossato including any casual loading.
The significant issue here for employers is that the Full Federal Court did not allow WorkPac to recoup the 25% casual loading paid to Mr Rossato against its unpaid leave entitlements and therefore allowing Mr Rossato to “double dip”.
What this means for employers
Both the Skene and Rossato decisions again serves as a reminder that simply labelling an employee’s engagement as a “casual” is not determinative and rather, the Courts consider all the features of the employment relationship.
Unless WorkPac seek to challenge this decision through the High Court, or there is legislative change, the recent decision will create further challenges and liabilities to employers with potential underpayment and leave entitlement claims arising from the engagement of casual employments. Now is a more important time than ever for employers to consider the work patterns of its casuals and how long they have been engaged for, especially for long term casuals who have continuous, stable, regular and predictable work patterns.
If you have any queries on how this may potentially impact you or your business, please feel free to contact us on 02 8325 1520 or alternatively email us at email@example.com