Workpac Pty Ltd v Rossato & Ors [2021] HCA 23

In a significant decision, the High Court of Australia has unanimously allowed an appeal by labour hire company Workpac, against a Full Federal Court ruling relating to the legal nature of casual employment.

The decision is consistent with the definition of “casual employee” that was inserted in the Fair Work Act 2009 (FW Act) in March 2021, as a consequence of the reasoning of the Full Federal Court.

In its decision, the High Court confirmed that a casual employee is one who has “no firm advance commitment” in relation to the duration of the employee’s employment or the days the employee will work. The High Court concluded that the Federal Court had erred in its finding that the existence of a long-term roster arrangement was inconsistent with this notion. Rather, the High Court accepted Workpac’s submission that, notwithstanding the roster, it was not obliged to offer any assignments to Mr. Rossato, and he could accept or reject any offer of an assignment.

The High Court recognised that, while Mr. Rossato may have over time developed a “reasonable expectation of continuing employment”, this was a “mere expectation” and not a firm advance commitment of continuing employment beyond the assignment.

Importantly, the High Court reinforced the notion that the express contractual terms are determinative of the legal character of an employment relationship. In this case, the contracts of employment were consistent with the terms and conditions of casual employment, including the payment of a 25% casual loading. In that regard, the High Court found the Federal Court erred to the extent that it expressed support for the notion that the characterisation exercise should have regard to the entirety of the employment relationship.

Because the High Court found that Mr. Rossato was a casual employee under both the FW Act and the applicable enterprise agreement, it was not necessary for the Court to consider Workpac’s submissions in relation to whether it was entitled to set off the casual loading component against the employee’s leave entitlements (i.e. the “double-dipping” issue).

In light of the reasoning of the High Court and the recent amendments to the FW Act, it is critical for employers to ensure that all casual employees are employed in accordance with a well-drafted casual employment contract, that is consistent with legislative and case law principles.

The Master Builders SA Workplace Relations Team is available to assist members with drafting and reviewing contracts, and providing advice in relation to these matters.