WorkPac Pty Ltd v Rossato – When is a casual not a casual
On 20 May 2020, the Federal Court of Australia handed down the decision in WorkPac Pty Ltd v Rossato.
The case found that “casual” mine worker Robert Rossato was eligible to be paid “annual leave, paid personal/carer’s leave paid compassionate leave and payment for public holidays” and that WorkPac could not seek “restitution” because of the money it had supposedly paid him in his hourly rate to compensate for those conditions.
A critical part of the decision is that they were attempting to off-set these entitlements against the casual loading and it was determined that merely paying a casual loading doesn’t necessarily make the employment relationship ‘casual in nature’.
The main issue wasn’t about the loading, though this creates a seemingly unfair double-dip scenario of a loading plus leave entitlement, it was to do with the “correct classification” of the worker.
Fair Work look at the nature of the engagement and if someone works an ongoing “regular and systematic” work pattern with “predictable periods of working time” this will likely be viewed as a permanent role and you can’t trade for money certain statutory entitlements like personal leave.
In this case, one issue was the casual was working a seven-day roster with known shifts well in advance, like a full-time worker. Working in such a manner creates a WHS risk by not be entitled to a rest period such as annual or personal leave.
In this latest decision, the Federal Court ordered WorkPac pay Mr Rossato unpaid annual leave, personal leave, compassionate leave and public holiday payment which are owing on the basis that he was, in fact, a permanent employee of WorkPac and not as casual (as he was engaged).
The Principles the Court Used in Making Its Findings
The Court relied on the principles established in the Skene decision, which indicate that in characterising casual employment, the ‘essence of casualness’ consists of, amongst others:
- The absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work;
- No firm advance commitment from the employer to continuing and indefinite work according to an agreed pattern of work (and the casual employee will also not provide a reciprocal commitment to the employer);
- Irregular work patterns, uncertainty, discontinuity, intermittency of work and unpredictability.
Under most awards casual conversion clauses have been introduced where a casual worker needs to be consulted with about transitioning to permanent (full-time or part-time) based on the ongoing nature of the working relationship, by working “regularly and systematically”.
The WorkPac worker was engaged long term and was provided their 7-day cycle work roster months in advance, so technically not a casual worker.
WorkPac argued that in the event the worker was determined not to be a casual, it should not have to pay the entitlements claiming, in effect, already paying an “off-set” in his weekly wages, in the form of casual loading.
But Justice Bromberg said the purpose of annual leave and personal/carer’s leave was to “provide employees with access to a break from work” in order to facilitate rest and recreation, or to address a personal illness or injury, rather than to provide remuneration.
“There is a superficial attraction to the notion that something given in substitution of an entitlement has an equivalent value to the entitlement itself and is therefore of the same character” said Justice Bromberg.
Casual loading not able to be set-off against leave entitlements
Concerning for employers, although WorkPac claimed that it should be able to set-off the casual loading it had paid to Mr Rossato against any unpaid entitlement or in the alternative recover the mistaken casual loading paid, the Court rejected these claims finding the loading could not be utilised to reduce the amounts owning with respect to leave entitlements or public holidays, and there was no obligation on the part of Mr Rossato to repay any loading incorrectly paid.
What does this mean:
Given the ramification of this decision, it is likely that it will be appealed to the High Court.
Practical steps Employers can take
Employers can take some practical steps to reduce the level of risk associated with this case, such as:
- Comply with relevant Modern Award casual conversion clauses and document all conversions with employees who elect not to convert to part-time or full-time employment when offered;
- Offer casual employees part-time or full-time positions when they become available, again documenting all related correspondence;
- Where possible, limit rosters to weekly or fortnightly;
- Have employees tender their availability for rosters as to give casual employees control over when they work;
- Have employees tender their availability and provide shifts using a workforce planning model that limits regular and systematic hours;
- Having a statement on all rosters stating that casual hours are not a guarantee of ongoing regular and systematic work and can be changed, varied or cancelled dependent on operational requirements and staffing levels;
- Ensuring casual employment contracts specify that there is no entitlement to ongoing and regular and systematic work and employees are compensated with the 25% casual loading in lieu of annual leave and sick leave entitlements;
- Ensure pay slips specify payment of the 25% casual loading
Please contact for assistance in understanding what this decision means for you and how you can take steps towards minimising your risks.