Appeal court affirms right of “casual” employees to leave


21 May 2020


On 20 May 2020 the Full Federal Court handed down its decision in the matter of WorkPac v Rossato [2020] FCAFC 84, confirming that certain employees engaged as casuals are entitled to leave benefits, and deciding that WorkPac was not entitled to claw back or set off amounts said to represent a casual loading (and therefore effectively paid in lieu of any entitlement to leave).  The decision largely confirms and expands upon the previous decision in WorkPac v Skene.

 

Not a true casual employee

The Full Court found, consistent with the Skene case, that Mr Rossato was not a true casual employee (and therefore not excluded from leave entitlements under the National Employment Standards (NES)) having regard to the regular nature of his employment.  The Court found that he had a firm commitment to continuing and indefinite work according to an agreed pattern of work (roster).

 

No entitlement to claw back or set off loading

The Full Court also rejected various defences raised by WorkPac to the effect that it ought to be entitled to claw back or set off the component of the employee’s pay which WorkPac said represented the 25% casual loading paid to the employee in recognition that casual employees are not entitled to leave. 

The Court reached this decision for a number of different reasons, some of which were specific to the facts and evidence presented in the case and others which are of more general application which we are in the process of analysing in detail. 

 

Implications for employers

The decision confirms, subject to any successful appeal to the High Court, that employers must now expect that casual employees who have a “firm advance commitment” as to the days/hours they will work will be considered to be permanent employees for the purposes of leave under the NES.

The federal government has indicated that it may consider legislative amendment to address this matter but there is nothing currently in the pipeline.

Employers should review their current employment arrangements and contracts in light of the detailed reasons in the judgments of the Full Court in order to assess their risks and:

  • identify whether contracts and arrangements should be varied to reduce risk and maximise the prospect of being able to set off or claw back casual loadings paid (and therefore avoid “double dipping”);
  • determine whether there are broader implications in relation to the effectiveness of contracts which include annual salary and associated set off provisions.

If you would like to discuss your workplace employment arrangements, please contact our workplace law team.

 

This article provides general comments only.  It does not purport to be legal advice.  Before acting on the basis of any material contained in this article, we recommend that you seek professional advice.

 

Authors:

 

Paul Dugan, Principal in our Disputes Team

Contact
Email:  pdugan@dmawlawyers.com.au
Direct Telephone:  +61 8 8210 2266

 

Kylie Dunn, Senior Associate in our Disputes Team

Contact
Email:  kdunn@dmawlawyers.com.au
Direct Telephone:  +61 8 8210 2286