The definition of casual employment has gone through some significant changes recently and has been given further clarification by an amendment to the Fair Work Act 2009 (FW Act), as well as the High Court revisiting the controversial decision of WorkPac Pty Ltd v Rossato (Rossato).[1]
Changes to the Fair Work Act 2009
The most prominent amendment was the addition of section 15A (1), which provided a formal definition of casual employees that had previously not been included.
There are three elements to casual employment:
- an offer of employment made by the employer to the person is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person; and
- the person accepts the offer on that basis; and
- The person is an employee as a result of that acceptance.
Section 15A (2) provides limited considerations for determining whether an offer of employment is made based on a firm advance commitment to continuing and indefinite work, such as whether there was a right to accept or reject work provided. Section 15A (3) also clarifies that a regular pattern of hours does not in itself indicate an advance commitment to continuing and indefinite work. In addition, section 15A (4) provides that the assessment of casual employment is to be made on the offer and acceptance of employment.
The above sections were enacted in an attempt to rectify the controversial decision of WorkPac Pty Ltd v Rossato [2020] FCAFC 84 by providing that the focus is on what was agreed to, rather than the subsequent conduct of the parties. The amendment limits the ability for individuals to make claims for entitlements based on the fact that they were not casual employees but rather permanent employees.
Changes from Rossato
On 4 August 2021, the High Court unanimously allowed an appeal from WorkPac Pty Ltd v Rossato [2020] FCAFC 84, providing that a mere expectation of continuing employment is not a basis for distinguishing casual employees from other types of employees. To determine the character of an individual’s employment, any search for a firm advance commitment has to be for enforceable terms in the contract, rather than ‘unenforceable expectations or understandings.’
Even though Mr Rossato was provided with various fixed-term assignment contracts, he was only employed on an assignment-by-assignment basis. He was not obligated to receive more assignments from WorkPac, nor was he obligated to accept any future assignments.
Although Mr Rossato’s roster was fixed and long-term in nature, all the roster did was add into his employment ‘qualities of regularity and systematic organisation’. Thus, any commitment by WorkPac was not consistent with an ongoing commitment to employment.
Additionally, the courts look for substance over labels and the character of the relationship between the parties as established by an employment contract (or other relevant instrument).
This decision aligns with the above-discussed amendments to the Fair Work Act 2009 (Cth). The subsequent developments indicate that the most critical feature in determining a casual employment relationship is the employment contract and whether it expresses any firm advance commitment to ongoing work. If you are unsure about your contractual rights, you should seek legal advice from an employment lawyer.
[1] WorkPac Pty Ltd v Rossato [2021] HCA 23.