• CMI Legal

High Court Interprets Contract to Determine Casual Employment

Earlier this year, we looked at the employment classification and rights of delivery drivers, as well as the Fair Work Amendment Act and its categorization of casual employees. In the continuing debate regarding which employees constitute casual employees, a recent High Court case may have shed some light on the issue.

In the case of WorkPac Pty Ltd v Rossato [2021] HCA 23 (“Rossato”), the High Court found that a casual employee is an employee who does not have a “firm advance commitment to ongoing work”. Although such definition has been introduced by the Fair Work Amendment Act in 2020, the significance of the High Court’s ruling lies in its strict legal analysis and priority of contractual terms when deciding whether a person is a casual employee.

The Facts in Rossato

Robert Rossato was engaged by WorkPac Pty Ltd to work on various coal mine sites from July 2014 to April 2018. His employment was governed by the WorkPac Pty Ltd Mining (Coal) Industry Enterprise Agreement 2012 (“2012 EA”). The agreement provided for a 25% casual loading in lieu of leave entitlements, as well as elements of the leave loading to entitlements waived by virtue of casual employment, which is not usual for such agreements.

Mr. Rossato worked under six separate employment contracts during his employment with WorkPac. All of which identified him as a casual employee paid as per hourly rates, but only three included terms for Mr. Rossato to receive the 25% loading. The parties also agreed that Mr. Rossato cannot engage in other work during his assignments with WorkPac.

After his retirement, Mr. Rossato contacted WorkPac to claim that he was not a casual employee and hence entitled to leave and holiday payments. Mr. Rossato cited the decision in WorkPac Pty Ltd v Skene [2018] FCAFC 131 (“Skene”).

The High Court’s Decision v.s. Skene

The Full Court of the Federal Court in Skene found that in order to determine whether a person is a casual employee, an assessment of the nature of the employer-employee relationship must be made. Despite the terms of the employment agreement, the Court took into consideration other factors including the parties’ post-contractual conduct, ultimately deciding that the relationship was not of a casual employment.

In Rossato, the High Court took a different approach, starting with the definition that a casual employee does not have a “firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work”. The question then was whether Mr. Rossato had such a commitment during the course of his employment.

In answering this, the High Court strictly referred to the terms of his contracts. The judges stated that it was not permissible to refer to the relationship of the parties unless in the case of a bogus employment contract. Furthermore, the fact that Mr. Rossato was employed for a long-term, regular basis is not inconsistent with the nature of casual employment.

It is clear that the High Court was unwilling to put much focus on the nature of the parties’ employment relationship and bargaining power.