The High Court of Australia (HCA) has determined in the case of WorkPac Pty Ltd v Rossato [2021] HCA 23, that a long-term employee Mr Rossato was a casual employee.
The HCA has unanimously found that Mr Rossato was a casual employee, and that casual employees are those with no “firm advance commitment”. The High Court gave prevalence to the express contractual terms and conditions, rather than to a “mere expectation of continuing employment”, which is not sufficient to distinguish casual employment from other forms of employment.
Background
Mr Rossato was a qualified and experienced production employee in the open cut black coal mining industry who commenced employment with WorkPac in 2014. Throughout his employment, Mr Rosatto worked under six consecutive contracts of employment which described the employment as casual.
Following the decision in WorkPac Pty Ltd v Skene [2018] FCAFC 131, the employee claimed that he was entitled to payments in respect of annual leave not taken by him and for payment for public holidays and for periods of compassionate and personal leave taken by him during his employment.
For more details on the facts of the case, please see our blog of the FCAFC decision here.
Firm advance commitment?
The High Court held that a court can determine the character of a legal relationship between the parties only by reference to the legal rights and obligations which constitute that relationship. 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 matters in which the parties performed their agreement”.
It went further to say that “something that is not binding cannot meaningfully be described in a court of law as a ‘commitment’ at all. Some amorphous, innominate hope or expectation falling short of a binding promise enforceable by the courts is not sufficient to deprive an agreement for casual employment of that character”.
The High Court held that it was not the role of the courts to “moderate a perceived unfairness resulting from a disparity in bargaining power between the parties”.
Terms and Conditions of Mr Rossato’s employment
The High Court considered and relied on contractual provisions governing the employment relationship to show the lack of a firm advance commitment to work, such as:
- the employment with Workpac was on an “assignment-by-assignment basis, with each assignment representing a discrete period of employment”;
- the employee could accept or reject completing the assignments;
- upon completion of an assignment, Workpac had no obligations to offer any other assignment(s);
- casual assignments could be terminated by either party on one hour’s notice; and
- the provision of a casual loading, which according to the High Court was a “compelling indication” that the parties intended Mr Rossato to be a casual employee not entitled to NES entitlements.
Roster system
In relation to the roster system, the High Court stated that despite Mr Rossato having a reasonable expectation of continuing employment on a regular and systematic basis, that did not amount to a firm advance commitment of employment and had limited significance.
The express terms of the contracts between the parties were inconsistent with the making of any such commitment.
Key takeaways for employers
The High Court has clarified that:
- a properly and clearly drafted contract is key to the determination of the employment relationship;
- a roster, set well in advance, does not provide a commitment to ongoing work where the roster is consistent with the terms of the contract;
- the payment of a casual loading will be considered important in determining casual employment.
Finally, it is important to remember that the relationship must be a genuine casual employment relationship and not merely “a label”.