In a decision that adds clarity to the question of whether an employee is a casual or not, today the High Court has overturned the original ruling in the Rossato case, ruling that the employee was indeed a casual.  The original ruling concluded that while the employee was engaged as a casual was in fact a permanent employee entitled to paid leave and all the other entitlements of permanent employment.  In handing down the original ruling a key determining of deeming Mr Rossato to be a permanent employee was the fact that he had been engaged on consecutive contracts for four years.

Case Review

The original ruling caused a media frenzy that ACAPMA covered at the time (https://acapmag.com.au/2020/05/hr-highlight-casual-controversybeyond-the-headlines/) .  Different to the Skene case, that had at the time only just been decided, the Rossato case was considered to be a clearer expression of casual employment – Rossato had a contract that expressly stated the employment status was casual and was paid a casual loading.  As a result when the original ruling came out it was stunning to some that the court found Mr Rossato to be a permanent employee.  This shock was compounded by the awarding of the entitlements.  In the original ruling, in addition to retaining the casual loading, Mr Rossato was also awarded payment for all leave – which the casual loading is designed to offset.

Why the original court ruled Rossato as Permanent?

The key to the employee being deemed to be permanent initially, was that, despite the contract identifying the employee as a casual, the contract also included a firm commitment to ongoing employment, in the form of end dates and the business behaved in line with these end dates – effectively rendering the first reference to the status of the employee as a casual as void, because they treated the employee as a permanent – expecting his whole labour to be directed where they directed it at all times through the specified length of the contract.

The key to the employee originally being awarded the payment for entitlements to leave in addition to being allowed to keep all of the casual leave loading that he had been paid in the course of his employment is a bit more complicated.  Had there been a legislative provision that clearly stated that the casual loading is designed to offset the lack of paid leave then the Workpac would have had a much easier time in convincing the court that the casual loading should be used to offset the unpaid leave entitlements if the employee was found to be a permanent employee – however there is no such legislative provision.  Similarly, if the contract had clearly stipulated this then it would have been easier for Workpac to argue the connection between casual loading and the entitlements.

Why the High Court ruled Rossato as Casual?

In overturning the original rulling the High Court has drawn attention to the fact that despite the contracts having an end date, there was in fact “no firm advance commitment” on the duration of the employment that would be necessary to find that Mr Rossato was a permanent employee.  “The express terms of the relationship between WorkPac and Mr Rossato were distinctly inconsistent with any such commitment” outlines the Decision.

When considering if the contracts themselves or the fact that they had an end date, or that rosters were provided in advance, rose to the level of a firm advance commitment to ongoing employment the finding was “A mere expectation of continuing employment on a regular and systematic basis is not sufficient for the purposes of the Act” as outlined in the Summary of the Decision.

What businesses can learn from this case?

“This finding is abundantly clear in what has been an area of confusion and concern for employers.  Hopefully this brings to an end the myths that long term casuals don’t exist (they do) or that rosters cannot be stable or communicated in advance (they can).  Hopefully it brings an end to the unnecessary confusion that has been applied to all casuals as a result of some quirks of certain casual employees” commented Executive Manager Employment and Training for ACAPMA, Elisha Radwanowski.

When this case first went through the courts and Mr Rossato was deemed to be a permanent employee, and received both the casual loading AND paid leave many employers and industry groups responded with strident and urgent calls to bring clarity about what is a casual employee and what the casual loading is for.  The concerns were real.  In that context the Attorney General called an invitation only Roundtable on Industrial Relations with business and uniron groups on Casuals.  Both Elisha and ACAPMAs CEO Mark McKenzie served on this Roundtable which extensively consulted and advised on the need for, and operation of, casual definitions, casual conversion and the role of the casual loading.

Following the Attorney Generals Roundtable on IR changes to the Fair Work Act came into effect in March 2021 which included a clear definition of casual employment and the role of the casual loading to provide offset for the loss of permanent entitlements.  These two elements combined legislated the clarity that was called for, but the High Court Rossato challenge being undetermined put a continuing shadow of uncertainty over how the courts would view the casual / permanent divide.

“With the changes to the Fair Work Act and now this decision the last shadow of uncertainty is gone – it is clear, if an employee is classified and paid as a casual (and the appropriate casual conversion process followed) the employee is a casual” concluded Elisha.

Summary of Decision:  https://cdn.hcourt.gov.au/assets/publications/judgment-summaries/2021/hca-23-2021-08-04.pdf

Elisha Radwanowski BCom(HRM & IR)
ACAPMA

 

SHARE THIS ARTICLE: