In the recent decision of Rossato v Workpac Pty Ltd (‘Rossato’) the Court ruled that a ‘casual’ employee had been misclassified and as a result was entitled to compensation for leave entitlements in accordance with National Employment Standards. The Court affirmed the test from the earlier case of Workpac Pty Ltd v Skene (‘Skene’) which is one of ‘firm advance commitment.’ It was held that Mr Rossato, who worked regular and predictable shifts was a full-time employee, even though he had been paid 25% casual loading. The Court made clear that to be properly classified as casual, employment must retain an “essence of casualness.” This encompasses factors such as intermittent or irregular employment by the hour with no commitment to continue employment for any length of time. It is also relevant whether an employee is able to elect whether or not to work and what termination arrangements are in place. The Court declined to apply regulation 2.03A from the Fair Work Regulations 2009, which was introduced following Skene. The regulation enables an employer to request that loading payments be accounted for when determining any claim for leave entitlements made by an employee who was improperly classified as a casual. The Court substantially undermined the function of this regulation by finding that it did not apply because Mr Rossato had claimed payment due pursuant to those entitlements, rather than ‘in lieu’ of the entitlements.
It is currently unknown whether Workpac will seek to challenge this decision in the High Court. However, since the decision was handed down, there have been significant calls for government intervention in the decision and for legislative amendment. In any event, this decision will not automatically mean that all casual employees can make a claim for leave entitlements. It will depend on the circumstances of employment in each case. Contact Daniel Morgan for advice on the implications of this decision for your business and how you can protect yourself.