Last week in the case of Workpac v Rossato the High Court unanimously upheld the appeal of the employer Workpac and ruled that the employee in question was a casual employee.

In several related decisions delivered by the Federal Court since 2018 it had been held that:

  • the employee working in the mining industry on shift arrangements determined well in advance was a permanent employee and entitled to the type of entitlements enjoyed by permanent employees such as annual leave; and
  • the employer was not entitled to offset the casual loadings it had paid the employee against the annual leave and other entitlements.

The High Court took the view that the fact that shifts may have been set well in advance was not of itself determinative of whether the relationship was that of permanent employment. Nor was the fact that the employment had become relatively systematic and continuous. Indeed the High Court regarded each of the shifts as separate assignments and not an advance commitment of ongoing work. Further, the High Court considered that the Federal Court had placed too little weight on the fact that the parties had contractually agreed that the relationship was that of casual employment.

In March of this year in response to the Federal Court decision the Commonwealth Government had amended the Fair Work Act to create a new statutory and retrospective definition of casual employment and which is similar in many respects to the view of casual employment expressed by the High Court. Under the legislation an employee will be classified as a casual if an offer of employment gives no firm advance commitment to regular work. And in determining whether the offer of employment makes no firm advance commitment of regular work the matters to take into account are as follows:

  • whether the employee can elect to accept or reject work;
  • whether the employee will work as required according to the needs of the employer;
  • whether the employment is described as casual employment; and
  • whether the employee will receive a casual loading.

The legislation stipulates that the question of whether or not an employee is a casual employee is assessed on the basis of the offer of employment not on the basis of any subsequent conduct of either party.

The legislation also introduced an obligation on employers (other than small businesses with less than fifteen staff) to offer permanent employment to casuals with at least 12 months employment if they had been working a regular pattern of hours. A six month transitional period was provided for but which expires on 27 September 2021. Employers will need to comply with their obligation to offer permanent employment by this date unless they have "reasonable business grounds" not to do so.

Take away points for employers

  • review your casual employment contracts to ensure they meet the tests stipulated in the legislation.
  • ensure compliance with any obligations under the legislation to offer permanent employment to casuals by the looming deadline of 27 September 2021.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.