Are your casual workers really permanent employees?

Thursday May 28, 2020

A recent landmark ruling by the full Federal Court of Australia has left employers and unions asking for a clearer definition on casual employment.

For the second time in recent years, WorkPac Pty Ltd has been found to have incorrectly determined a permanent employee as a casual worker. Where did they go wrong and how blurred are the lines when it comes to casual workers?

The ruling of WorkPac Pty Ltd v Rossato, found that a casual employee cannot be determined by their contract if their working arrangement suggests otherwise. This is regardless of casual loading.

The court found that certain aspects of Mr Rossato’s work engagement, such as regular and predictable work patterns, advance rostering and the provision of accommodation facilities, suggested he was in fact a permanent employee.

Although his employer had paid Mr Rossato casual loading, the finding that he was not a casual worker meant he was entitled to back payments of annual leave, personal leave, compassionate leave and public holiday pay. Rossato was not instructed to repay his casual loading and WorkPac was not permitted to deduct this from the outstanding leave entitlements.

What does the ruling mean for the future of casual work?

The outcome of this case confirms the risk associated with engaging casual workers on a regular basis. Future cases are likely to follow suit and with Australia’s high rate of casual work arrangements, many more employers could fall foul of the court if their casuals are found to be permanent employees. It’s a costly mistake to make.

The case is likely to be appealed at the High Court and there have been calls for legislative reform to clarify casual working once and for all. Until then, it is essential that employers understand the implications of incorrectly engaging casuals.

Actions for employers

If you have reliable casual workers who have become more regular since you first employed them, this recent ruling, in support of the previous WorkPac case, suggests they might no longer be classed as casual workers.

It should be noted that a statement in a contract is not enough to identify a casual worker and the totality of the working arrangement must be taken into consideration to ensure the appropriate remuneration is provided.

The Fair Work Act states that casual employment should be random and ad hoc. It would be wise to periodically review the working patterns of your casual workers to ensure you are compliant.

Get in touch for a review of your processes and casual contracts to see if you could be at risk.

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