Federal Court's Ruling on Casual Employment

21 May 2020

On 20 May 2020, the full bench of the Federal Court redefined what constitutes a casual worker. Michael Corrigan digs into the detail.

According to the Federal Court ruling in the case of WorkPac Pty Ltd v Rossato, those who have regular rostered shifts will no longer be classified casual. They will instead be classified as full-time or part-time, regardless of their employment contracts, thus entitling them to annual leave accruement, as well as personal/carer’s leave and paid compassionate leave.

The full bench noted that the definition of a casual employee as used in the expression “other than casual employees” in the following sections of the Fair Work Act was not in contest:

  • s 86 dealing with entitlements to annual leave;
  • s 95 dealing with entitlements to personal/carer’s leave; and
  • s 106 dealing with compassionate leave.

In this definition, a casual employee is an employee who has no firm advance commitment from her or his employer to continuing and indefinite work according to an agreed pattern of work (firm advance commitment).

Firm advance commitment

An employee is deemed to have firm advance commitment in the case of an agreed pattern of work, which does not have to be regular or systematic. The examples used by the court to describe this agreed pattern of work are recognised as:

  • full-time pattern of work such as 9am to 5pm Monday to Friday or seven dayshifts of 12 hours each followed by seven nightshifts of 12 hours each
  • part-time pattern of work such as three hours every Tuesday and Thursday morning
  • The court also observed that there is a fundamental difference between regular employment and irregular employment.

In terms of periods of working time:

  • regular employment consists of predictable periods of working time and provides substantial certainty that the work will be both available to be performed and will be performed during the designated periods
  • irregular employment provides neither predictability nor certainty.

Many employer groups have commented that the court has allowed double dipping in the sense that casual loading was paid in lieu of the benefits. However, the full bench stated that WorkPac is not entitled to restitution; and is not entitled to set off (in the sense that the expression is used in the present context) the payments it made to Mr Rossato against its present liabilities.

What do I need to do as an employer?

1.     Carefully evaluate the true nature of casual employment in your practice. The Architects Award 2020, plus the majority of Modern Awards, have a casual conversion clause that is either enacted at six or 12 months in which an employee may transition to either part-time or full-time work.

2.     Ensure that casual employees are not used with firm advanced commitment and that you do not roll casual contracts over at the expiration of the first contract, if using fixed term.

3.     Remember that the Fair Work Act 2009, the Architects Award 2020 and the National Employment Standards still apply.

What is the Federal Government’s response?

The Minister for Industrial Relations, Christian Porter, has said that this decision would have “immediate practical implications” for businesses’ bottom lines “at a time when so many have taken a huge hit from the Covid-19 pandemic”. He observed the potential for this decision to further weaken the economy at a time when so many Australians have lost their jobs. (Australian Financial Review, 20 May 2020)

Porter flagged the possibility of an appeal and said the government would consider intervening in the case and consider legislative options.

As soon as the ACA is aware of any further developments related to casual employment, we will issue an alert to all our members accordingly.

Michael Corrigan is the General Manager of Human Resources & Industrial Relations at Platinum Employee Relations.

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