The High Court last week unanimously held that the Full Federal Court had erred in its 2020 decision in relation to the status of Mr Rossato’s employment with labour hire firm WorkPac as casual. The High Court held that Mr Rossato was a casual employee for the purposes of the National Employment Standards and the relevant enterprise agreement. On this basis, he was paid a casual loading and was not entitled to any additional entitlements of the type successfully claimed in the earlier WorkPac case, WorkPac v Skene, such as notice, annual and personal leave, and leave loading.
The High Court reiterated the Full Court’s position in an earlier case (Hamzy v Tricon International Restaurants (2001) 115 FCR 78), that “The essence of casualness is the absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work.”
The Court’s decision emphasised the importance of the contractual relationship between the parties, noting that of course, that contract cannot be contrary to the relevant legislation. The important question then becomes “What are the terms of the contractual relationship?” Although it is possible to infer or imply terms into an incomplete written contract, the Court has clearly indicated that this must not be used to include terms that are contrary to the written agreement or were not in the contemplation of the parties at the time of making the agreement.
Importantly, the High Court follows similar reasoning to the position now set out in the Fair Work Act 2009 (Cth), that this contract is (for the most part) agreed at the time of commencement of employment, and subsequent matters cannot be used to “re-interpret” the relationship at a later stage of employment see our earlier article here. The Court is at pains to note however that this does not prevent the parties from varying the terms of the contract at any time, including by the exercise of an employee’s right to seek casual conversion.
So what does this mean for businesses? Once again, this is a timely reminder that all employment relationships should be reflected in an agreed employment contract, that ensures both parties understand the terms of that agreement. We strongly recommend that all employers review their casual employment contracts to ensure employees will be considered casual employees. In addition, it is important to clearly set out in the casual loading portion of any flat rate and identify whether any other payments (such as allowances or overtime rates) are included in that rate. This includes any over-Award payments.
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