An important decision was handed down by the High Court yesterday in the WorkPac v Rossato case. The decision overturns the Federal Court’s controversial ruling that Mr Rossato was not a casual employee, and was therefore entitled to the benefits of continuing employment such as annual and personal leave, notwithstanding he received a causal loading.
The Federal Court’s decision sparked concerns by employers that they might be required to pay casual employees benefits of a continuing worker as well as the 25% leave loading. Yesterday’s judgment now resolves the threat of casual employees ‘double-dipping’, confirming that contracts are decisive in determining employment types, rather than any subsequent conduct. Employers will now enjoy the clarity that where they and their employees have committed to the terms of employment within a written contract, it is those terms that one must look at when determining the type of employment relationship.
The ruling brings the common law meaning of a ‘casual employee’ closer to the recently amended definition found within the Fair Work Act 2009 (Cth). Following these developments, a ‘casual employee’ is an employee who has no firm advance commitment from the employer as to the duration of the employee’s employment or the days (or hours) the employee will work and provides no reciprocal commitment to the employer.
Casual employees can however continue to benefit from the mechanism introduced earlier this year, requiring employers to offer casual employees the choice to become permanent where:
- The employee has been employed for 12 months; and
- During at least the last 6 months of that period, the employee has worked a regular pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to work as a full-time employee or a part-time employee,
and there are no reasonable grounds for the employer to not offer conversion.
Workdynamic is assisting a number of employers assess their casual employee pool prior to the 27 September 2021 deadline, and we would be happy to discuss your organisation’s needs.