Court decision regarding ‘casual’ workers

Yesterday’s Full Court of the Federal Court decision in the case Workpac v Rossato [2020] FCAFC 84 decided staff with regular shifts should not be considered “casual” workers, even if their contracts define them as casual staff.  Workpac had sought declarations that Mr Rossato was a casual and was not entitled to an additional annual leave loading following their loss on similar facts in a previous case in 2018 concerning an employee, Mr Skene.

Declarations were made by the Court after mine worker Robert Rossato argued his previous employer WorkPac had labelled him a “casual” worker even though he worked “regular, certain, continuing, constant and predictable” shifts set in advance for almost four years. Mr Rossato had a 25 per cent casual loading included in his wages but the court held that, as a permanent employee, he was also entitled to additional annual leave payments.

Increased entitlements

“Casual workers” in Australia could now be entitled to paid annual, personal, and carer’s and compassionate leave. It has also exposed employers to potential backpay claims worth billions. Casuals make up around 20 per cent of the Australian workforce and at least 1.6 million of the 2.6 million casuals in Australia work on a regular, ongoing basis.

The decision has been applauded by workers and union leaders, with Australian Council of Trade Unions (ACTU) secretary Sally McManus claiming it had put the problem of casualisation under the spotlight and would end a “loophole” that disadvantaged workers, forcing them to work for minimal hours in the “gig economy”. CFMEU National President Tony Maher described the mislabelling of regular workers as “casual” as a “rort”.

Employers call for updated legislation to remove uncertainty

Employer groups claim the decision proves the need to update the Fair Work Act to provide certainty to businesses and casual employees, and to prevent double-dipping claims by casuals who have been paid additional remuneration instead of the entitlements of permanent employees.

Employers propose that the term ‘casual employee’ needs to be defined in the Fair Work Act, in line with the common definition in modern awards – ‘a casual employee is an employee engaged and paid as such’.

Employers’ greatest concern arising from this decision is that an employee engaged as a casual and paid a casual loading (or a loaded rate that accounts for a casual loading) should not be allowed to turn around years later and claim the entitlements of a permanent employee, such as annual leave.

 

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Please note that this article has been prepared by Margaret Miller, partner of Bell Legal Group, for information purposes only. It is not legal advice nor should it be relied upon as such.