In late May the Federal Court issued a long-awaited decision that has thrown into question the definition of ‘casual employment’ and the entitlements owed to long-term casual employees.
In the case of casual employee Mr Rossato vs labour hire company WorkPac, the Court ruled that Rossato (the employee) was entitled to be paid annual leave, paid personal/carer’s leave and paid compassionate leave. It held that WorkPac (his employer) could not use extra pay (i.e. the 25% casual loading he received in lieu of these benefits), to ‘set off’ that liability.
While Rossato was contracted on a casual basis, the substance and patterns of his employment relationship were found by the Court to be more akin to permanent work. It held that, as his employment was “regular, certain, continuing, constant and predictable”, Rossato was in fact ‘other than a casual employee’ for the purposes of sections 86, 95 and 106 of the Fair Work Act 2009, which meant he was owed extra entitlements.
The decision has potential impacts for the way that long term casuals are engaged and paid. Employer groups have expressed concerns about the ‘double-dipping’ of entitlements and the impact on businesses. Given the wide-ranging implications of the judgment, the Government is considering whether it should amend legislation and said it may back any appeal to the decision.
However, employers are being reminded that this decision does not mean that all casuals are entitled to annual and sick leave. The Court’s ruling applied to a very specific case – the decision is more applicable to casuals that are rostered as if they are permanent staff.
We would encourage any clients with long standing casual staff to contact your HR/legal advisor, or employer association, if you have any concerns about your own position. In the meantime, we have noticed that leading HR advisory services are recommending that employers with long term casuals consider the following practical advice to mitigate risk:
