Full Federal Court allows casuals to double dip!

Employers who regularly engage casual employees have been eagerly awaiting the outcome of a case WorkPac v Rossato being heard in the Full Federal Court. It was hoped this decision would overturn an earlier decision in Skene which determined that a casual employee was entitled to be paid annual leave when in receipt of a casual loading. In a further blow to employers the Federal Court again confirmed the approach in Skene. This decision may have long lasting implications on the way employers engage casual employees.

In  Rossato, the employee (Mr Rossato) was engaged as a casual in the Coal Mining industry, through labour hire provider, Workpac. In line with the requirements under the applicable legislation and industrial instrument, Mr Rossato was paid a 25% casual loading, which  is intended to compensate casual employees for not receiving paid annual leave, personal leave and compassionate leave.

Mr Rossato was engaged by Workpac on six consecutive contracts over a period of four years and his labour was provided to various mining locations. After the completion of the casual engagements, Mr Rossato wrote to Workpac claiming that he had not been engaged as a casual employee and was seeking entitlements to paid annual leave, personal/carer’s leave, compassionate leave and public holiday pay entitlements.

The decision in Rossato was heavily influenced by the presence, or otherwise, of a “firm advanced commitment as to the duration of the employee’s employment or the days/ hours the employee will work” either in the contract or in the post-contractual conduct of the parties. The predictability, stability and regularity of the work resulted in the Full Bench deciding that Rossato was not a casual employee. While the contract of employment which described him as casual was a relevant consideration, it was not conclusive in determining the true nature of the relationship.  Consequently, Workpac are now required to pay the applicable leave entitlement as if the employee had been a fulltime employee.

The Federal Court also rejected a claim by Workpac that the payment of the accrued leave entitlements should be ‘off set’ against the 25% casual loading which was paid to Rossato. This allowed Rossato to ‘double dip’ and receive both paid leave entitlements and the casual loading.

The outcomes in Skene and Rossato matters, mean that employers need to exercise care and caution in engaging casual employees on a regular and predictable basis.  Employers need to understand and consider the true nature of the engagement and use casual employees for irregular or unpredictable engagements that do not provide a “firm advanced commitment” to their ongoing employment.

The full decision can be found here.

If you would like to know more about best practices associated with the engagement of employees please contact us here and a Mapien consultant will get back to you ASAP. Alternatively please call us on +61 7 3833 1200.