Federal Court Reinforces Need for Express Contractual Terms

Recently, the Full Court of the Federal Court of Australia issued its decision in the matter of WorkPac Pty Ltd v Rossato [2020] FCAFC 84 (Rossato), a decision which sent shockwaves across businesses in Australia in relation to the engagement of casual workers.

In Rossato, the Full Court made several key determinations:

The question of whether an employee is, according to law, a casual employee or a permanent employee called by a different label has plagued employers for decades.  In many senses, the Full Court decision does not raise any new principles on this particular area of law.

Ultimately, the Courts will always look to the nature of the relationship as the deciding factor.  Thus if you engage a person and call them a casual, but employ them indefinitely and on a regular, systematic and predictable manner, it is likely that a Court will determine that the employee is permanent and not a casual.  In such circumstances the employee will then be entitled to the benefits associated with being a permanent employee.

In our view, the decision in Rossato reinforces the importance of considering the employer’s labour needs prior to the engagement of any additional staff, and also in ensuring that the engagement is reflected in a written contract of employment, which clearly and precisely sets out (amongst other things) the nature of the engagement, the expectations of the employer and the remuneration to be paid.

It is also important to ensure that where a casual loading is paid to a casual employee, the amount of the loading is stated in the contract and reference is made as to which entitlements the loading is being paid in lieu of.

Where additional staff are required but there is uncertainty as to the hours of work required or the duration of the engagement, employers should also consider whether it would be appropriate to engage the employee for a set period of time, for a particular task, or for a particular season, or a combination of these.

Finally, if you have engaged a “casual” employee and that person has had regular and systematic employment for a lengthy duration, and has an expectation that the employment will continue indefinitely, you should seriously consider whether that engagement should be converted to permanent employment.

If you need assistance with your employment contracts, or seek further information in relation to your legal rights and responsibilities, or assistance with COVID-19 related matters, please contact us on (08) 9321 5451 or by email at brian@bailiwicklegal.com.au.  For further information about our legal services, please visit our website: https://www.bailiwicklegal.com.au.

The above information is a summary and overview of the matters discussed. This publication does not constitute legal advice and you should seek legal or other professional advice before acting or relying on this information.

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