JUST IN: Full Federal Court Confirms Entitlements for ‘Casual’ Employees

Workplace Directions

WorkPac Pty Ltd v Rossato [2020] FCAFC 84

The Australian Government is flagging the possibility of making further legislative changes in light of a decision this week from the Federal Court, which some are saying allows for ‘double dipping’ by casual employees.

Following on from the decision in WorkPac Pty Limited v Skene [2018] FCAFC 131, the Full Federal Court has again held that a worker characterised by WorkPac as a casual is able to access leave entitlements in addition to the casual loading built into his rate of pay, in circumstances where there is no clear identification of a casual loading.

Background

Mr Rossato was a qualified and experienced production worker in the open cut black coal mining industry. He engaged in six consecutive contracts with WorkPac from
28 July 2014 to 9 April 2018.

Under the first contract, Mr Rossato worked at the Collinsville Mine between
28 July 2014 and 29 May 2015, before moving to Newlands Mine under the second contract, between 1 June 2015 and 19 February 2016. The third contract involved a significant change in Mr Rossato’s rate of pay. He continued at Newlands Mine between 19 February 2016 and 27 September 2016. The remainder of the contracts were worked at the Collinsville Mine. The fourth, fifth and sixth contracts were motivated by an increased pay rate. Mr Rossato retired on 9 April 2018 to care for his partner who had become ill.

Mr Rossato worked in accordance with rostered shifts. At Collinsville Mine, he was rostered seven days on / seven days off.

The contracts provided for a flat rate of pay, increasing from $40 to $50 per hour.

The WorkPac Pty Ltd Mining (Coal) Industry Enterprise Agreement 2012 (Agreement) applied to Mr Rossato’s employment.

After his retirement, Mr Rossato wrote to WorkPac on 2 October 2018, asserting that he was not a casual employee. He claimed entitlements such as paid annual leave, paid personal / carer’s leave, paid compassionate leave and public holiday pay entitlements under the Fair Work Act 2009 (Cth) (FW Act) and the Agreement. He relied upon the Full Court judgment of WorkPac Pty Ltd v Skene in making his claims.

The decision

WorkPac argued that Mr Rossato was a casual worker, including because of the lack of firm advance commitment as to his days and hours.

The Full Court unanimously held that Mr Rossato was not a casual employee, with reference to the actual work performed, and stated that even putting WorkPac’s case at its highest, it could not be argued that Ms Rossato was a casual employee.

The purported lack of firm advance commitment to days and hours worked did not meet the threshold of casual employment. The employment was described as of indefinite duration and stable, regular and predictable ‘such that the postulated firm advance commitment was evident in each of his six contracts’.

WorkPac argued that if Mr Rossato were found to be a permanent employee that at least part of his remuneration was a severable casual loading and in circumstances where he was found to be permanent, WorkPac was entitled to restitution of that casual loading. The Federal Court rejected this argument, stating that there was nothing which suggested that any part of his weekly pay was a casual loading which was paid in lieu of any particular NES entitlements.

WorkPac also in part sought to rely on Regulation 2.03A of the Fair Work Regulation 2009. That Regulation provides that when an employee is engaged as a casual and a portion of their income is clearly identifiable as being compensation for NES entitlements, an employer is able to claim an offset for the amount so paid in circumstances where claims are made for amounts in lieu of NES entitlements by employees mistakenly classified as casual.

The Federal Court found that the Regulation did not apply in the circumstances, because Mr Rossato’s claim did not satisfy all of the preconditions necessary for an employer to make such an offset claim.

It is worth noting that in certain circumstances an employer will be able to claim such an offset where the preconditions in the Regulation exist.

Takeaways for employers

The Australian Government is currently assessing this decision to see if legislative amendments are required, while the Opposition has argued that there is no need for such legislative amendments and continues to try to disallow Regulation 2.03A.

There is also the possibility that the case may be appealed to the High Court. Consistent with the decision in Skene, this case illustrates that the actual work performed will be determinative of the characterisation of the employment relationship, despite any inconsistent contractual terms. A holistic view should be considered, inclusive of the regular pattern of work, when looking at whether a casual engagement or series of engagements exists.

It also remains necessary to clearly characterise any casual loading component of an employee’s pay in terms of the entitlements that the loading is intended to replace, to avoid ‘double dipping’.

Employers should also be aware of the approach taken by the Fair Work Commission in various Awards which provide casual employees with the opportunity to elect to become permanent employees in circumstances where they have worked qualifying periods.

Further information / assistance regarding the issues raised in this article is available from Stephen Marriott – Senior Associate, Jemma Dalley – Graduate at Law, or your usual contact at Moray & Agnew.


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