Breaking news today, as the High Court of Australia today (4 August 2021) has unanimously overturned the previous decision of the Full Court of the Federal Court in WorkPac v Rossato concerning the definition of and entitlements that casual employees are eligible for.

The Federal Court had previously found that casual employees engaged on a regular and permanent basis could claim entitlements reserved for permanent employees, namely annual, sick and other leave entitlements. The fallout of this decision was estimated to expose Australian businesses to up to $39 billion in potential claims.


Background

Mr Rossato, who had been employed on a casual basis by labour hire company, WorkPac, for three and a half years, commenced proceedings claiming that he was eligible for entitlements reserved for permanent employees under the Fair Work Act 2009 (Cth) (the Act) and the WorkPac Pty Ltd Mining (Coal) Industry Enterprise Agreement 2012 (EA).

In reaching the earlier decision the Federal Court considered the definition of ‘casual’ and the typical characteristics of casual employees, namely that casual employees are employed in the absence of a ‘firm advance commitment’.

In the end, the Court ruled that employees engaged on a regular and permanent basis could claim permanent employee entitlements, regardless of their classification as casual.

Chamberlains wrote an article on WorkPac v Rossato and the reasoning of the Full Court of the Federal Court shortly after the decision was reached last year. Click here to read more.


Decision of the High Court

The High Court held in their judgement handed down today that Mr Rossato was a casual employee. In doing so, the Court asserted that casual employees have no firm advance commitments from their employer about the duration of their employment or their days or hours of work, and that the employee provides no such commitment to their employer in return.

 

Key Takeaways

This decision handed clarifies the meaning of ‘casual employee’ and determines that where an employer and employee have entered into an employment relationship in a written contract, and have adhered to that contract, the employment relationship will be determined by how the employee is classified in the contract (i.e. casual, part-time or full time).

In this case, Mr Rossato was defined as a casual employee in his contract and was paid as such throughout his employment.

The initial decision of the Federal Court created much anxiety and uncertainty among employers, so hopefully this definitive ruling of the High Court will provide greater certainty and prevent any costly double-dipping claims.

Amendments to the Act inserted earlier this year, however, have created a casual conversion requirement for employers. Under this new requirement, casual employees must be offered the opportunity to become permanent if they have been employed by the same employer for 12 months and worked regular hours and patterns for the last 6 months.