The alignment of law and common law: Defining a casual employee – Emploi et RH


Australia: Alignment of Statute and Common Law: Defining a Casual Employee

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On March 27, 2021, the Fair Work Amendment (support for the Australian Jobs and Economic Recovery Act 2021 (Cth)(“Change in legislation“) amended the Fair Work Act 2009 (Cth) (“AOF“) and inserted a definition of “casual employee”. This new definition provides that the status of a person as a casual employee is determined at the beginning of the employment relationship, regardless of his subsequent behavior. It is important Note that the Amendment Act applies to offers of employment that were made before, during or after commencement, but not in place of binding decisions made by courts prior to the Amendment Act.

Until recently, there was no legal definition of a casual employee, at common law or under statute. The term “casual worker” is not a precise legal term but rather a colloquial expression. In the absence of a definition, the facts of each arrangement were considered on a case-by-case basis to determine whether a worker was casual.

The legislative changes for casual employees were made in response to this perceived uncertainty created by the application of the common law meaning. After the amending law and the decision of the High Court of WorkPac Pty Ltd v Rossato [2021] HCA 23 (“WorkPac vs. Rossato”) the common law and the FWA are now more aligneded.

Background of WorkPac vs. Rossato

WorkPac Pty Ltd is a labor hire company that provides labor to mining companies in Queensland. Mr Robert Rossato was an experienced “production operator” who had been engaged by WorkPac at various coal mine sites in Queensland for an uninterrupted period from July 2014 until his retirement in April 2018.

At first instance, the full Federal Court ruled that Rossato, employed by WorkPac as a casual employee on 6 consecutive contracts, was a permanent employee with leave entitlements including annual, personal and compassionate care leave plus payment public holidays.

The Full Court reached this conclusion on the basis that his terms of employment were such that, in accordance with the common law understanding of casual employment at the time, Rossato had a “firm prior engagement”. to continue working with WorkPac.

The High Court decision

The High Court unanimously overturned this decision and determined that Mr Rossato was a casual employee and therefore not entitled to the various benefits he had claimed.

The High Court found that the Rossato’s employment was on an “assignment-by-assignment basis” and that there was no “firm prior commitment” to continuous work, indicating the casual nature of the employment relationship. The court found that WorkPac and Rossato committed the terms of their employment relationship to written contracts and then adhered to those terms. These contractual arrangements did not include a mutual commitment to a continuing working relationship after the completion of each assignment.

The High Court stressed the importance of the terms of the employment contract, saying:

“To insist on binding contractual promises as reliable indicators of the true character of the employment relationship is to recognize that it is the function of the courts to enforce legal obligations, not to act as an industrial arbiter whose function is to synthesize a new concord of industrial differences…

To insist that nothing less than binding contractual terms are likely to characterize the legal relationship between employer and employee is also necessary in order to avoid the descent into obscurantism which would accompany the acceptance of an invitation to enforce “something more than an expectation” but less than a contractual obligation.”

In reaching its conclusion, the High Court adopted a strict contractual analysis to characterize the relationship between Mr Rossato and WorkPac.

What does this decision mean for employers?

The Amendment Act and the High Court decision in
WorkPac vs. Rossato reinforces the primacy of the employment contract in determining the nature of casual employment. It is therefore prudent for employers to consult a lawyer to review their casual employment contract to ensure that the terms of casual employees do not result in “a firm prior commitment to continued employment”.

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