Archive for month: October, 2021

The High Court has handed down its much-anticipated decision in the Rossato case, determining that the Full Court of the Federal Court had erred in its decision.  

Background

The Decision of the Full Court in WorkPac Pty Ltd v Skene (Skene) in 2018, sent shockwaves through the nation when it ruled that a mine worker who was employed under a casual contract of employment, was in fact a permanent employee. 

This decision departed from the conventional understanding of casual employment. Because the Fair Work Act 2009 (Cth) had no definition of a ‘casual employee’, the court felt it necessary to define the term. In doing so, the court adopted a wholistic analysis of the employment relationship, similar to the approach taken in determining whether a person is an employee or contractor. Despite the clear terms in the WorkPac Enterprise Agreement, and the employee’s contract of employment, the court felt it necessary to consider the actual conduct of the parties, including their post-contractual conduct. 

The decision in Skene was a cause for concern for many employers across the country, who feared that the decision could lead to a tidal wave of casual employees seeking retrospective entitlements. Closer to home, the Skene decision represented an enormous risk to WorkPac, who had many employees in the same boat. 

Rossato was seen as the best vehicle to test the Skene case.

 Initially the Full Court adopted the reasoning of the earlier Court and upheld the Skene decision, with Justice Bromberg expressly endorsing the decision, reaffirming the need to examine the “entirely of the employment relationship”.

High Court Appeal

On Appeal to the High Court, WorkPac’s arguments focussed on the fact that Mr Rossato did not have a ‘firm advance commitment’, and therefore he was a casual employee, not entitled to the same benefits as a permanent, ongoing employee. WorkPac relied on the terms, both express and implied, within the Mr Rossato’s contract of employment, arguing that these terms dictated the nature of his employment and that it was not appropriate to conclude that the post-contractual conduct of the parties had altered the nature of the contract. 

The High Court unanimously determined that Mr Rossato was a casual employee and therefore was not entitled to the benefits that he had sought. 

In its decision the High Court adopted a strict contractual analysis of the employment relationship [paragraphs 62-63]:

“To insist upon binding contractual promises as reliable indicators of the true character of the employment relationship is to recognise that it is the function of the courts to enforce legal obligations, not to act as an industrial arbiter whose function is to synthesise a new concord out of industrial differences.”

“To insist that nothing less than binding contractual terms are apt to characterise the legal relationship between employer and employee is also necessary in order to avoid the descent into the obscurantism that would accompany acceptance of an invitation to enforce “something more than an expectation” but less than a contractual obligation. It is no part of the judicial function in relation to the construction of contracts to strain language and legal concepts in order to moderate a perceived unfairness resulting from a disparity in bargaining power between the parties so as to adjust their bargain…”

 The High Court’s decision offers much needed certainty to employers who, following the decision in Skene, were fearful that a significant number of casual employees would seek retrospective access to a range of entitlements such as annual leave. 

Looking towards the future, many of the issues addressed in Skene and Rossato have been addressed through the recent amendments to the Fair Work Act [Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 (Cth)], which adopted a statutory definition of casual employment. Notably, the 2021 amendments also placed an obligation on employers to offer permanent, ongoing employment to casual employees after 12 months of continuous service (subject to a range of qualifying criteria). 

Notwithstanding these amendments, which offer clarity for future employment disputes, the decision in Rossato limits the potential of retrospective disputes. Rossato has been seen by many employers as a ‘sigh of relief’ moment, but it is an important and timely reminder that, in light of the amendments to the Fair Work Act, employers should ensure that casual are drafted in such a way as to reflect the amendments.

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