The High Court of Australia overrules casual employment decision

The High Court of Australia unanimously allowed an appeal of the Rossato decision in which the Full Court of the Federal Court had made a landmark decision about the nature of casual employment.

Key Takeaways

• A 'casual employee' is an employee who has no firm advance commitment from the employer as to the days or hours the employee will work and provides no reciprocal commitment to the employer.
• When determining whether someone is a casual employee, the Court will consider the basis of the terms of the employment contract at the time that it was entered into.
• A mere expectation of continuing employment on a systematic and regular basis is not sufficient to constitute firm advance commitment; where the parties adhere to the terms of the employment agreement, the firm advance commitment must be found in the binding obligations of the parties.

Mr Rossato's Employment with WorkPac

Mr Rossato was employed by WorkPac under a series of 6 contracts, each of which provided for casual employment for an 'assignment', between 2013 and 2018.

Mr Rossato argued that he was not a casual employee on the basis that:

• he received his set roster a year in advance;
• it followed regular shift patterns;
• his shift hours rarely deviated from his roster and when they did, it was due to unforeseen circumstances; and
• it was expected that Mr Rossato would attend every shift for which he had been rostered.

WorkPac however argued that Mr Rossato could accept or reject each assignment as it was offered and that his employment agreements stated that the terms were on an 'assignment-to-assignment basis'. Therefore, WorkPac argued that there was no firm advance commitment.

High Court's Decision

The High Court held that 'the search for the existence or otherwise of a "firm advance commitment" must be for enforceable terms, and not unenforceable expectations or understandings that might be said to reflect the manner in which the parties performed their agreement'.

The Court sought to answer the question as to whether Mr Rossato was a casual employee by reference to the terms of the employment contract at the time it was entered into, and that regular and systematic shifts were not a sufficient basis for implying that Mr Rossato was not in fact a casual employee.

The Court did however consider the following to be key factors in determining that Mr Rossato was a casual employee:

• Mr Rossato was paid a casual loading;
• there was no commitment made that there would be ongoing work offered after the completion of each assignment or any obligation on the employee to accept such an offer; and
• the wording and terms of the employment agreement.

Further, the Court stated that 'it is the function of the courts to enforce legal obligations, not to act as an industrial arbiter whose function is to synthesise a new concord our of industrial differences'. The Court was reluctant to deviate from the terms of the employment agreement where Mr Rossato had not provided enough evidence that his employment was conducted in a way inconsistent with those terms.

The High Court ultimately concluded that the contractual arrangements between Mr Rossato and WorkPac did not include a mutual commitment to an ongoing working relationship beyond each assignment. The fact that Mr Rossato's roster provided regularity and consistency of work shifts did not extend beyond each assignment period. On this basis, Mr Rossato was a casual employee.

You can view the full decision here.

Conclusion

It is important to be aware that the construction of employment agreements will be integral to determining whether employees are classified as casual or not.

Employers should take this opportunity to have their casual contracts reviewed to ensure they are protected.

If you have any questions about this article or to seek advice in relation to your employment agreements, please contact Madeleine Brown on (08) 6188 3340.