Workplace, people walking past meeting 1900x500

The test for casual employment remains unchanged, WorkPac loses second case

Libby Pallot, Walter MacCallum, Anthony Massaro, Ben Tallboys, Abbey Burns, Caitlin Walsh, Caitlin Meers, Natasha Sim, Jaqueline Wilson, Morgan Smithe & Sophie Cusworth

Information current at date of publication: 25 May 2020. The average reading time for this Alert is 6 minutes.

The test for casual employment remains unchanged, WorkPac loses second case

The Full Bench of the Federal Court has handed down another decision confirming that a casual whose working arrangements more closely resemble those of a permanent worker, is entitled to paid annual leave, personal/carer’s leave, and compassionate leave entitlements.

The most recent decision, WorkPac Pty Ltd v Rossato [2020] FCAFC 84, follows the Full Bench’s decision in WorkPac Pty Ltd v Skene [2018] FCAFC 131 which involved similar circumstances and on which we wrote the article ‘Casuals Are Still Casuals’. The court’s latest decision in Rossato reinforces the court’s previous ruling that despite an employee’s contract describing them as a casual, the court will consider a range of factors to determine their entitlements. 

Background

The most recent case was commenced by the labour-hire company WorkPac in relation to its employee, Mr Rossato, whom it engaged via six contracts of employment over the period of 28 July 2014 until 9 April 2018. WorkPac hired Mr Rossato out to Glencore Australia Pty Ltd to work in its mines throughout his employment. Glencore rostered Mr Rossato to work alongside its permanent employees and other labour-hire employees and Mr Rossato had little time off during his engagement. Mr Rossato was provided with Glencore’s rosters that set out up to a years’ worth of shifts. Mr Rossato worked on a drive-in, drive-out basis and was provided with accommodation by Glencore during each block of rostered shifts. 

Mr Rossato’s employment contracts all differed slightly and included different rates of pay. The first three contracts were largely the same, they all contained an estimated length of assignment as a guide (6 months in two contracts and 154 days in one contract) and they contained a 6 month qualifying period. The contracts also had references to Mr Rossato working in accordance with the relevant Glencore rosters. The fourth, fifth and sixth contracts differed from the first three but were similar to each other. They did not contain a ‘length of assignment’ clause and they stated that Mr Rossato was engaged on a casual assignment and could refuse and cancel shifts. 

WorkPac sought a declaration from the court that:

  1. Mr Rossato was a casual employee at common law, and for the purpose of paid leave entitlements under the Fair Work Act 2009 (Cth), and within the meaning of the enterprise agreement that applied to him, and was therefore not entitled to paid annual, personal/carer’s, or compassionate leave under the Act or the enterprise agreement or payment for public holidays under the enterprise agreement; or
  2. alternatively, that WorkPac could offset amounts paid to Mr Rossato in excess of the permanent employee rates, or as a casual loading, against his claim for paid leave, or seek restitution in relation to those amounts.

Casual employment revisited but not reimagined

Like the Skene decision, the Rossato decision does not set out any new authority in relation to the criteria that should be considered when determining whether a person is a casual employee.

However, in its most recent judgment, the court focused on whether there was a ‘firm advance commitment’ in relation to the employee’s engagement. In determining whether this commitment existed, the court considered a range of factors, including:

  1. whether the employment was intermittent or irregular, informal and unlikely to continue for any length of time, and other than regular and stable;
  2. if the employer could elect whether to offer employment on a particular day and if, when offered, the employee could elect whether or not to work;
  3. if the employee only worked on demand or as required over a short period;
  4. whether the employment was described as being by the hour and whether the employment may be terminated on an hour’s notice (as relevant but not conclusive considerations);
  5. the description which the parties give to their relationship (as relevant but not a conclusive consideration);
  6. the employment arrangement considered as a whole, not just the express terms of any contract;
  7. the circumstances known at the time of the engagement or circumstances and the manner of performance of the contract; and
  8. changes in the employment relationship that occur after commencement.

Mr Rossato’s engagement by WorkPac had to fit with Glencore’s requirements. This meant that along with all of Glencore’s production workers, Mr Rossato worked extended hours (full-time as well as additional hours) in accordance with long-term shift rosters which required the regular and predictable performance of work in accordance with the continuing pattern of blocks of shifts set well in advance by Glencore.

Despite more express references to accepting and rejecting casual employment in the fourth, fifth and sixth contracts, by the time of the fourth contract, Mr Rossato had already been engaged on three Glencore mine assignments and both he and WorkPac had experience and knowledge of Glencore’s requirements. Glencore had an on-going requirement for WorkPac to provide it with employees who would work as regular employees performing regular shift work in accordance with the pattern of work programmed in advance by the rostering arrangements.

The court considered other factors, including that the employment contracts did not suggest that the work Mr Rossato would be required to perform under them, would be irregular or intermitted and that the shifts he was allocated were options. In fact, on the face of the contracts, Mr Rossato may have faced disciplinary action or penalties if he refused shifts. In practice, the court found that Mr Rossato was never actually asked by WorkPac or Glencore if he intended to work rostered shifts, nor did Mr Rossato enquire whether he was required to work when rostered.

The court also pointed out other factors that suggested the engagement was other than casual, including that because Glencore provided Mr Rossato with free accommodation during his block of rostered shifts, it was unlikely that Mr Rossato could then accept and reject shifts as he saw fit.

In summary, the court found that Mr Rossato’s engagements included a firm advance commitment, and were therefore not ‘other than casual’ employment. 

Double-dipping

Like Mr Skene’s situation, under each of the contracts WorkPac paid Mr Rossato a flat hourly rate. However, unlike in Skene, in this case the court found that the first three contracts contained identifiable casual loading in the contract hourly rates. 

WorkPac sought to offset amounts paid to Mr Rossato against his claims for unpaid leave, or have them applied as restitution. 

The court rejected these claims, finding that even where casual loading was identifiable, it was not a severable portion of a payment for which restitution could be sought. In relation to the offset claim, the court found that the amounts paid to Mr Rossato were not designated in respect of leave entitlements and therefore no set off could occur.

Key takeaways

As we advised previously in relation to the Skene decision, the Rossato decision requires employers to be aware of the substance of their employees’ working arrangements, rather than the way they are described at the commencement of a contract.

It may be prudent for employers to review their casual employment arrangements particularly where they have nominated casual employees for the JobKeeper scheme, thereby indicating that those employees are engaged on a regular and systematic basis. Such an election does not make the employees ‘other than casual’, however it may be worth specifically reviewing the other employment arrangements of those employees.

Employers should:

  1. continuously review contracts against actual work practices to ensure that employees are properly characterised;
  2. review rostering practices and amend them if required, remembering that casual employees are characterised by their irregular and intermittent work patterns, not the label given to them or the fact that they are paid casual loading;
  3. consider offering part-time or full-time contracts to those who work regular hours and seriously consider casual-conversion requests made in accordance with an award or enterprise agreement; and
  4. review contracts to ensure that casual loadings may be able to be set off against annual leave entitlements if a claim is made.

How we can help

Please contact Russell Kennedy Workplace Relations, Employment and Safety Team for advice regarding your employee arrangements under an enterprise agreement or the Fair Work Act.

If you would like to keep in touch with Alerts and Insights from our expert Workplace Relations, Employment and Safety team, you can subscribe to our mailing list here.

View related insights

police-emergency-lights-thumb--360-240

Directors convicted of industrial manslaughter in Queensland

30 Jun 2020

Last year we published an alert about the new Workplace Manslaughter laws coming into effect in Victoria in July 2020. At that time, while there were comparable schemes in Queensland and the Australi ...

View
Banking-and-finance-money-law 360 x 240

Wage Theft and Wage Increases

26 Jun 2020

Underpayments have become a significant issue in the Australian workforce, with large underpayments reported in recent months by the Made Group, Woolworths, Coles and Qantas. Last week the ABC signed ...

View
Charity-volunteer-thumb-image-360-x-240

The JobKeeper scheme and award flexibility in the social and community services industry

1 May 2020

The COVID-19 pandemic has caused disruption within workplaces in the social and community service industry and employers are continuing to navigate the options available to them as they evolve. From ...

View