The High Court has overturned a landmark decision on casual worker backpay in a move that validates recent changes to the law on casual staff.
In a decision handed down today (August 4), the court overturned the Full Federal Court’s judgment in the WorkPac v Rossato case, finding that Workpac will not need to backpay Rossato leave entitlements because he was not engaged as a permanent employee.
The court ruled that Rossato was employed on an “assignment by assignment” basis, which did not include a mutual commitment to an ongoing working relationship; that there was no advance commitment; and that a mere expectation of continuing employment on a regular and systematic basis is not sufficient for the purposes of the Fair Work Act (FW Act).
It further ruled that in carrying out each assignment, Rossato worked as a casual employee for the purposes of the Act and relevant enterprise agreement, and that established shifts fixed in rosters made in advance are not evidence of a firm advance commitment.
History of the case
In May 2020, the Federal Court ruled that casual employees with “predictable patterns of working time” are likely to be considered permanent.
The decision raised concerns among businesses about potential double payments to casual workers that could cost up to $39 billion in backpay.
Federal legislation, which took effect in March this year, was designed to address the issue of double-dipping by setting a clear definition of casual employment.
The FW Act changes ensure a court must account for casual loading in claims for unpaid entitlements.
This means that where a worker is found not to be a true casual, any backpay must be reduced by an amount equivalent to the casual loading they had already received.
As the Rossato case was appealed to the High Court before the FW Act changes took effect, the revised provisions did not apply and the case still needed to be settled by the court.
CCIWA Workplace Relations Manager Ryan Martin said today’s ruling served as a reminder to businesses to update their employment contracts.
“Given the court’s comments in respect to written contracts, it is a timely reminder that employers should ensure their employment contracts are carefully worded and aligned to the recent legislative definition of casual employment where appropriate,” he said.
“This is a good decision that provides further certainty about where the goalposts are for a business engaging casual employees.”
CCIWA’s employment law team can help you navigate employment contract revisions.
Contact CCIWA’s Employee Relations Advice Centre on (08) 9365 7660 or [email protected] for more.
