The High Court of Australia’s Take on Casual Employment
Last year, the Full Federal Court of Australia ruled in Workpac Pty Ltd v Rossato that certain casual employees could claim permanent employee entitlements. In particular, those long-term casual employees who had an expectation of continuing and regular work could claim such entitlements. This impacted employers and casual employees nationwide, many of whom have made major changes to their work arrangements in the aftermath of this decision. Yet, in the appeal just this month, the High Court of Australia took a different approach. The High Court found that continuing and regular work alone was not enough to establish permanent employment.
Establishing Permanent Employment
The High Court of Australia’s decision clarified that only two factors are to be considered when establishing permanent employment. Firstly, there must be a firm, advance commitment to continuing and indefinite work; and, secondly, this commitment must be based on a binding, written employment contract.
Last year, the Full Federal Court of Australia ruled that the entirety of the employment relationship should be considered, which can include factors such as regular work rosters, or expected or obligated work shifts. This has now been discarded by the High Court of Australia in favour of clearly defined rights and obligations of the employment relationship, which are to be found in the employment contract.
What Does this Mean?
For employers that have faced claims for unpaid permanent employee entitlements as a result of the Full Federal Court of Australia’s ruling, they make be able to engage the statutory offsetting rule. We explored this at length in this article. This means that, in situations where a court has ruled in the employee’s favour and has found them to be a permanent employee, the court will reduce the amounts payable by the entitlements already paid. However, with the new High Court of Australia ruling, it may well be the case that it is more difficult for casual employees to bring claims for unpaid permanent employee entitlements.
While last year’s ruling has been overturned, amendments to the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 (Cth) on 26 March 2021 persist. Importantly, this includes the new definition of ‘casual employee’, which we spoke about at length in this blog. In summary, a person is a casual employee if they accept an offer of employment on the basis of no advance, firm commitment to continuing and indefinite work according to an agreed pattern of work. A regular pattern of work alone does not suffice to establish this commitment. Instead, one must look to the stipulations of the employment contract.
Even if casual employment is established, employers have new responsibilities. In the case of casual employment, the casual loading requirements must be specifically identified in the employment contract since the 26 March 2021 amendments to the Fair Work Act 2009 (Cth).
If you would like assistance in assessing your current employee entitlements, casual loading requirements, and risk of claim by your employees, contact one of our experienced employment lawyers at (02) 4929 7002, email us or complete an enquiry form.