WorkPac Pty Ltd v Rossato [2021] HCA 23
Introduction
The recent decision has application for health professionals as employers.
The judgement statement of the High Court sets out that:
“The High Court held that a “casual employee” is an employee who has no firm advance commitment from the employer as to the duration of the employee’s employment or the days (or hours) the employee will work, and provides no reciprocal commitment to the employer.
Where parties commit the terms of their employment relationship to a written contract and thereafter adhere to those terms, the requisite firm advance commitment must be found in the binding contractual obligations of the parties; a mere expectation of continuing employment on a regular and systematic basis is not sufficient for the purposes of the Act….. “
Practice owners need to give proper consideration to this decision in engaging persons who work with no firm advance commitment if they wish them to be casual employees.
Background
After the decision of WorkPac Pty Ltd v Skene (2018) 264 FCR 536 which decided that a worker in similar circumstances to Mr Rossato was not a casual employee and therefore entitled to the benefits of being a permanent employee, Mr Rossato sought to be paid for all of the leave he would have accrued to which he was not entitled as a casual employee.
Workpac denied his claims and Workpac filed in the Federal Court seeking declarations that he had been a casual and that he was not entitled to the leave sought and further that if he had been a casual, there was a set off for the payment made as a casual for those entitlements or restitution of those amounts. Workpac was unsuccessful and appealed to the High Court.
It had been agreed that the expression “casual employee” in the Fair Work Act referred to an employee who has no “firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work”.
The question was whether such a firm advance commitment existed in respect to Mr Rossato.
High Court Reasoning and Decision
The Court decided that the question as to whether a firm advance commitment had been made was to be determined at the time of entry into the employment contract and, in the case of an employment contract wholly in writing, by reference solely to the express terms of the contract.
Resort to post‐contractual conduct as an aid to determining the nature of the employment relationship was said to be impermissible.
Freedom to Contract
“Nothing in the statutory framework within which the employment relationship in the present case has been established relevantly inhibits the freedom of parties to enter into a contract for casual employment. So far as casual employment is concerned, the Act leaves the making of such an arrangement to be agreed between employer and employee .”[1]
Firm Commitment ?
“Indeed, it is difficult to be confident about what is meant by “something more than an expectation” if that “something more” is not a binding agreement between the parties by way of a contract or a variation of a contract. Something that is not binding cannot meaningfully be described in a court of law as a “commitment” at all. Some amorphous, innominate hope or expectation falling short of a binding promise enforceable by the courts is not sufficient to deprive an agreement for casual employment of that character.”[2]
Court’s role is to enforce Legal Obligations.
“To insist upon binding contractual promises as reliable indicators of the true character of the employment relationship is to recognise that it is the function of the courts to enforce legal obligations, not to act as an industrial arbiter whose function is to synthesise a new concord out of industrial differences. That it is no part of the judicial function to reshape or recast a contractual relationship in order to reflect a quasi-legislative judgment as to the just settlement of an industrial dispute has been emphatically the case in Australia at the federal level since the Boilermakers Case.”[3]
The Fair Work Act
Section 15A of the Fair Work Act was amended so as to prevent ‘double dipping’ so that workers cannot be paid as casuals and then claim the benefits of permanent employment.
What is necessary to evidence of the lack of an advance commitment?
Section 15A(2) provides that to determine whether the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person, regard must be had only to the following considerations:
- whether the employer can elect to offer work and whether the person can elect to accept or reject work;
- whether the person will work as required according to the needs of the employer;
- whether the employment is described as casual employment;
- whether the person will be entitled to a casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument.
This has reaffirmed that if parties engage in a written casual contract of employment that specifically provides that there is no advance commitment and provides for example the pay rates that are demonstrated to have a casual loading, and that that loading is in lieu of leave that would otherwise be due, then that agreement is one of casual employment if the parties do perform their obligations and observe the contract, then the arrangement can be confidently said to be one of casual employment.
Other Effects of the Rossato Decision
Recent cases about employee and independent contractor[4] relationships consider circumstances where the relationship has been reduced to writing.
Rossato speaks of circumstances where there is no reason to doubt that the terms of that relationship are committed comprehensively to the written agreements by which the parties have agreed to be bound.
There is some thought that this decision may mean that arguments as whether professionals who contract in writing as independent contractors such as health professionals may be less likely to successfully claim to be employees.
Upcoming High Court decisions will no doubt make this clearer.
[1] WorkPac Pty Ltd v Rossato [2021] HCA 23 at [58]
[2] Ibid at [61]
[3] Ibid at [62]
[4] ZG Operations Australia Pty Ltd & Anor v Jamsek & Ors [2020] FCAFC 119 and CFMMEU v Personnel Contracting Pty Ltd [2020] FCAFC 122
