The Full Court of the Federal Court of Australia has recently reconfirmed that a person paid and deemed a casual employee under their employment contract can be considered a full-time employee and be entitled to the various benefits of a full-time employee under the National Employment Standards.
What were the facts?
Mr Rossato had worked for Workpac between July 2014 and April 2018, entering into six consecutive contracts of employments which provided that he was a casual employee. While an employee of Workpac Mr Rossato:-
- Worked all of his rostered shifts (except when the mine was shut down over Christmas and other limited occasions);
- Worked a roster of 7 days on / 7 days off; and
- Was provided with a shift roster that was set some 7 months in advance of the date that it was provided.
Following the decision of Workpac v Skene, Mr Rossato argued he was not a casual worker and was therefore entitled to claim his outstanding entitlements of annual leave, paid personal/carer’s leave, paid compassionate leave and public holiday pay entitlements.
Workpac applied to the Court for declarations stating that Mr Rossato was a casual employee pursuant to his contract of employment, the Workpac Enterprise Agreement, at common law and for the purposes of the Fair Work Act.
They also ran two alternative arguments before the Court, namely:-
- They were entitled to restitution (recovery) of the casual loading which they claimed was included in the hourly rate they had paid to Mr Rossato. They sought that restitution on the basis of mistake and/or partial failure of consideration; and
- Under the false belief that Mr Rossato was a casual, they were entitled to set off the amounts of overpayment paid to Mr Rossato against any entitlements which Mr Rossato may be found to be entitled to.
What did the Court decide?
The Court found that Mr Rossato was a permanent employee and not a casual employee.
In coming to this Decision, the Federal Court relied on the following facts:
- Mr Rossato was employed for an indefinite duration;
- His employment was ‘stable, regular and predictable’; and
- The circumstances of Mr Rossato’s employment could not be significantly distinguished from those in WorkPac v Skene.
What was the decision on the alternative arguments put forward by Workpac?
All members of the Court also rejected Workpac’s alternative arguments.
The court determined that there was no mistake, Mr Rossato had been paid his hourly rate and restitution for the casual loading was not payable. Further WorkPac did not establish an identifiable severable portion of its payments which could found a claim for restitution.
With respect to the argument that they were entitled to set off the overpayments paid to Mr Rossato, the Court determined that the particular National Employment Standards entitlements related to the taking of leave which meant the entitlement could not be satisfied by substituting the taking of leave with a payment.
What about the Government Regulations that were brought in to stop double dipping?
Workpac also claimed that they had made the payments to Mr Rossato under regulation 2.03A of the Fair Work Regulations 2009 (Cth). This was brought in following the Workpac v Skene decision in an attempt to stop casuals “double dipping” by being paid a casual loading and also claiming entitlements under the NES.
The Court found that the regulations did not apply because Mr Rossato was not making a claim to be paid an amount “in lieu of” one or more of the relevant NES entitlements and rather wanted payment of entitlements conferred by the NES
What does this mean for employers?
If this decision isn’t appealed, the Government may step in and amend the legislation. Until this happens this decision remains the current authority and employers face considerable uncertainty.
Employers need to review how they are employing their workers and carefully consider whether casual workers are the most effective engagement for their business or if they need to be moved to part-time or full-time employment.
If you employ workers on a casual basis and require advice or assistance in managing their engagement, then please contact our office to arrange an appointment.
