The shockwaves of yesterday’s Workpac Pty Limited v Rossato decision from the Full Court of the Federal Court of Australia are beginning to reach employers who have often employed, or still employ, long term, regular and systematic casuals.
It is safe to say that employers have been “pushing the boundaries” for some time. This has been partly due to economic conditions, but partly because of some inconsistent decisions over the years which have not been able to provide a clear definition of a “casual” and in which circumstances are they entitled to paid leave.
It is clear that Workpac Pty Limited v Rossato is a landmark decision. Now, employers (particularly large ones) now need to sit and wait for the onslaught which may arise from this, such as union action or class action law suits. This is of course unless the Federal Government take swift action from a legislative perspective.
The Workpac matter had been brewing for some time and it can be said that this decision was indeed long awaited. The Courts have been, for some time, leaning towards this view that “permanent casuals” were highly unlikely to be “just casuals” and that they were to receive paid leave entitlements. However, the real question (in our view) that has been answered is whether these kinds of employees would be “double dipping” if they were to seek an underpayment of wages because their leave entitlements were not paid to them.
In this instance, Mr. Rossato worked with Workpac Pty Limited, a labour hire firm, in Glencore mines across six contracts. He was described in his contract of employment as a “permanent casual” and paid his 25% “casual loading”. However over the course of his contracts, being for three and a half years, Mr. Rossato would work regular and predicable shifts with firm, advanced commitment through a rostering regime. He worked seven days on and seven days off. It was argued that Mr. Rossato was working in a “regular, certain, continuing, constant and predictable manner”.
Cases of this nature had been brewing. In 2018, the Full Federal Court of Australia held that paid entitlements were owed to a “permanent casual employee” (which incidentally involved Workpac too and with similar facts to the one above). In 2019, in a case involving a “casual full time” employee in an aircraft engineering business, the Full Court of the Federal Court found that the employee was a genuine casual employee and therefore, was not owed paid leave entitlements.
Many employment lawyers were waiting for the Workpac Pty Limited v Rossato decision to be handed down for clarification.
What did the Full Court of the Federal Court decide?
In a 273-page ruling, the full bench, Justices Mordy Bromberg, Richard White and Michael Wheelahan, unanimously held that Mr Rossato was not a casual based on his pattern of work, “even taking WorkPac’s case at its highest”.
They held that:
- Mr. Rossato was in fact entitlement to be paid annual leave, paid personal/carer’s leave paid compassionate leave and payment for public holidays – regardless of what his contract of employment stated;
- Workpac Pty Limited cannot “set off” against liabilities any of those payments that should have been made under Mr. Rossato’s six contracts over those three and a half years, because of the 25% leave loading that they had placed on top of his usual ordinary hourly rate under the industrial instrument; and
- Workpac Pty Limited are unable to ask for “restitution for unjust enrichment”. In other words, by having to back pay those employees who may be eligible for such payment, this could be considered as “double dipping”, thus unjustly enriching the casual employees. The Full Court of the Federal Court dismissed this view, and did not provide Workpac restitution for this alleged unjust enrichment of the casuals.
The Ramifications of the Decisions
We are yet to know whether Workpac Pty Limited will seek to challenge the decision in the High Court of Australia. Irrespective of this, calls are already being made to the Federal Government to amend legislation to prevent what could end up being a considerably high number of underpayment of wage claims, or class action claims, by casuals throughout Australia.
Should anyone be concerned about this decision, and the impact that it may have on their business (where long term, regular and systematic casuals are used), do not hesitate to contact Kathryn Adams (Principal Lawyer) at firstname.lastname@example.org or Bianca Muller (Paralegal) at email@example.com.
We will of course keep you updated should new information come to hand.
As always, this article is for information purposes and does not contain specific and formal legal advice particular to your circumstances.