On 20 May 2020, the Federal Court released its decision in WorkPac Pty Ltd v Rossato [2020] FCAFC 84, and reconfirmed casual employees who work regular and systematic hours with a “firm advance commitment” of work are more likely considered permanent employees, rather than causal.  This conclusion operates despite the employee being contractually classified as a casual employee and paid a casual loading. 

This decision means, Mr Rossato, who was engaged as a casual employee is entitled to claim, and be paid entitlements to annual leave, personal/carer’s leave and compassionate leave as contained in the Fair Work Act 2009 (Cth) (the Leave Entitlements).

Background
Between 2014 and 2018, Mr Rossato was engaged by WorkPac (being a labour hire company) to work for Glencore in one of its Queensland coalmines.  Over the course of 4 years, Mr Rossato was issued with 6 separate and consecutive employment contracts.  During each period of engagement, Mr Rossato was engaged as a casual “Field Team Member”.

In 2018, following his retirement and relying on the decision in WorkPac v Skene [2018] FCAFC 131 (Skene), Mr Rossato wrote to WorkPac claiming he was entitled to payment of his Leave Entitlements in addition to the entitlements contained in the WorkPac Pty Ltd (Coal) Industry Enterprise Agreement 2012 (the Agreement).

WorkPac subsequently commenced proceedings in the Federal Court seeking declarations confirming Mr Rossato:

1. was a casual employee rather than a permanent one; and
2. if Mr Rossato is found to have Leave Entitlements owed to him, could WorkPac off-set these entitlements against payments made to Mr Rossato in the past.

Decision
Justices Bromberg, White and Wheelahan JJ, in their 266 page judgement considered, in detail, the legislative framework regarding casual employment in Australia and re-affirmed the submission in Skene: “the indicia of causal employment referred to in the authorities [being] irregular work patterns, uncertainty, discontinuity, intermittency of work and unpredictability – are the usual manifestations of an absence of a firm advance of commitment”.  

Further, the Court submitted that that the description parties use to categorise their relationships is not determinative nor conclusive of the entirety of the employment arrangement: “the assessment of whether a person is a “casual employee” is to be conducted by a characterisation of all of the relevant facts which speak to the type of employment that existed at the time the entitlements in question accrued.”

Their Honours then turned their attention to how Mr Rossato worked under his 6 various contracts, specifically: working predictable and systematic rosters which operated on a 7 days on/7 day off basis, with some rosters being set some 12 months in advance.  The Court was critical of this and noted this conduct was indicative of a “firm advance commitment” on the part of the parties to be engaged on an “on-going” indefinite employment rather than a casual one.

In conclusion, their Honours “found that Mr Rossato was not a casual FTM under the [Agreement], noting that the circumstances of his employment could not be distinguished in a material way from those of Skene”.

Finally, the Court rejected WorkPac’s submission that it should be able to off-set any amounts owed to Mr Rossato regarding his Leave Entitlements on the basis the casual loading was not intended for the payment of his Leave Entitlements, rather the casual loading rates were “inferentially, if not expressly, appropriated to the debts owed by WorkPac in respect of the hours of work performed by Mr Rossato and, therefore, that they were not made in payment of any entitlements to leave.”

Both parties have been given until 3 June 2020 to confer and file proposed orders and declarations, with any reply for the Court to consider.

Implications
This decision has sent shockwaves among employer groups all over Australia.  Federal Attorney General and Minister of Industrial Relations said “what appears fairly obvious on the face of the decision is that it has immediate practical implications for the bottom line of many Australian businesses at a time when so many have taken a huge hit from the COVID-19 pandemic.”

The AHA appreciates the significant impact this decision will have on members during this extremely challenging period.  The AHA, in conjunction with relevant stakeholders and other industry associations will work closely with government to work towards a favourable outcome for our industry.