Leave Pay And Casual Workers: Recent High Court Ruling

A recent High Court decision has shed some light on the definition of a casual employee and when leave pay is payable.

Changes to the Fair Work Act

S 15A of the Fair Work Act 2009 (Cth),(“The Act”) more or less reflects Workplace Pty Ltd v Rossato (“Rossato”) wherein the key proposition of “no firm commitment” in the Act was tested. However it should be noted that the amendment of s 15A to the Act did not apply at the time to Rossato, nor was the High Court forced to apply it at that time.  The criteria for whether an employee is a casual employee is predicated on the employer communicating to the employee that the relationship is one of “no firm advance commitment”.

Casual

The High Court expressed that the concept of a “casual employee” relates to a lack of a “firm advance commitment”. In other words, there is no long-term commitment concerning the days or hours that the employee must work.  The courts have used in the past indicia to indicate this lack of commitment. For example, the employee may work intermittently or there could be uncertainty as to shifts and rosters. However now, the Court in accordance with the statutory scheme has placed greater emphasis on the contract itself.

Outstanding Leave Pay

In the case of Rossato, the employee Rossato was claiming unpaid annual leave and other leave like personal leave. The employer denied this. Instead, they stated that he was a casual employee. Furthermore, they had paid him the 25% loading which accounts for those entitlements. Therefore, the company did not have to pay entitlements.

Type of Contract

The employee signed a contract that had “casual” as part of the title.  There were additional short contracts that included the term “casual” as well. In this case, the employer successfully used the express terms of the contract as evidence to show that the relationship was of a casual nature. The High Court reiterated the importance of certainty which a contract provides as to the nature and type of  employment relationship. Conversely, if the contract was of lesser importance then parties would be waiting for the pronouncement of the Court to know their employment status. Thus, the shift in employment law due to the previous statutory reforms and now Rossato is that later conduct is generally not relevant as to the status of the parties.

Fine Points: Assignments

The Court discussed how a reasonable expectation that employment would continue is not the same as a firm commitment. As such, consistent hours do not immediately indicate that there is a full-time employee relationship. The Court also found that the phrase “assignment by assignment basis” was indicative of the fact that the employee could reject any assignment. The ability to do so counts against there being a firm commitment.

Rosters

Previously the Federal Court found that a roster system whereby the employees’ hours were determined up to a year in advance was evidence of a full-time arrangement. In contrast, the High Court found that regularity in working hours and organisation do not prove that an employee is permanent part-time/full-time. The High Court emphasised the point that behind those regular hours were actual case by case assignments. Assignments that the employee could ultimately terminate and reject. As a point of comparison, the Act itself explicitly states that regular hours do not imply necessarily that the employee is a permanent employee.