Casual Work Conundrum No More

 

Written by Managing Partner Clayton Glenister and Senior Associate Sewar Mitanis

 

Employers are facing strict regulations they must get right in order to legally offer casual employment to their employees. Please read on for our guide to the High Court of Australia’s recent decision that affects employers in Australia.

The Rossato Case

The casual employment topic has been subject to much debate and uncertainty following the Federal Court decisions on this issue in what is known as the Rossato case. On 4 August 2021, the High Court of Australia released its decision overturning the Federal Court’s findings and bringing the confusion and uncertainty around casual work to an end. 

 

In May 2020, the Federal Court had found that employees engaged on a casual basis but worked regular and predictable shifts over an extended period were not casual employees and that the employer could not “set off” against the amounts it owed the employee, any amount paid by way of casual loading.

 

Effectively, the Federal Court’s decision put employers at the risk that casual employees who received 25% casual loading, may later be found to not be casual and therefore claim paid leave entitlements (such as annual leave and sick leave).

Who Is A Casual Employee?

The High Court found that for the employment to be “other than” casual, a “firm advance commitment as to the duration of the employee’s employment or the day (or hours) the employee will work” must exist. 

 

It was also determined that casual employment can exist for the long term, with a casual employee working regularly and systematically and that the true nature of the working relationship is to be defined only in the contract between the employer and their employee. Further, the High Court noted that “a reasonable expectation of continuing employment…on a regular and systematic basis” is entirely consistent with casual employment.

 

Casual Work Conundrum No More

 

What Is A “Firm Advance Commitment”?

The High Court found that a “firm advance commitment” for ongoing work is an enforceable promise and it must exist in order for the employee to be considered any other than a “casual” arrangement. Further, a mere expectation on behalf of an employee that their employment would continue and that they would be provided with work cannot alter the nature of the casual employment relationship. 

The Contract Of Employment Prevails

The High Court found that where an employee’s contract is wholly in writing, the terms of that contract are construed to determine whether the firm advance commitment exists. It was also found that the fact that hours of work may be set by a roster system for long periods is of limited significance and would not be considered a commitment by the employer to an ongoing employment relationship.

 

Casual Work Conundrum No More

What Should Employers Do?

Employers should ensure that their employees’ casual contracts meet the criteria set by the High Court and the Fair Work Act 2009, which now requires employers to offer to convert casual employees to permanent if certain criteria are met. To read more about casual conversion read our article on changes to the Fair Work Act 2009, known as the Omnibus Bill. Employers can access individual advice from our expert Employment and Workplace Relations team

 

Contact us today if you need assistance understanding your employee’s casual work arrangements on 07 5539 9688 or leave an enquiry