On 20 May 2020, the Full Federal Court handed down a decision, which is likely to have significant impacts on those who employ casual employees. In WorkPac Pty Ltd v Rossato [2020] FCAFC 84, the Court found that an employee of a labour hire business, engaged and paid as a casual employee, was in fact NOT a casual employee (or as the Court put it, ‘other than a casual employee’). This entitled the employee in question to annual leave, compassionate leave and personal leave.

This decision means that many employers will need to re-assess their current arrangements. This is especially relevant to labour-hire companies, where ‘permanent casual’ work arrangements are common.

Practical implications

Employment which is regular, certain, continuing, constant and predictable may actually be deemed employment that is ‘other than casual’. If this is the case, such employees may be captured under this new ruling and you may be required to provide compensation for unpaid entitlements.

Importantly, following the decision, the payment of casual loading may not be set-off against employee entitlements (perhaps the most contentious part of this decision due to potential ‘double-dipping’ of casual loading and leave entitlements).

In order to assess your current workforce and accordingly, your liability following this decision, it is important to consider the arrangements you have in place with ‘casual’ employees. Does the contract provide that you can elect whether to offer employment on a particular day and can the employee decline this? Are shifts unpredictable, or is work pre-determined? Do you prepare fixed and repeated rosters, or clear patterns of work? Is termination of employment available at short or no notice?

This is not an exhaustive list, but a great start in order to assess your potential liability and whether you may need to consider moving casual employees to permanent employment arrangements.

Legislative change

Following this rather contentious decision, there have been calls to make legislative amendments, which could potentially overturn the Court’s decision. However, at present, this decision stands and employers should carefully assess their employment arrangements.

If you are unsure as to how this decision might affect your organisation, please feel free to reach out to us for assistance. We are only a phone call away…

Francine Clancy, Senior Associate