Contract Law rules supreme

The High Court has overturned the Federal Court ruling in the WorkPac Vs Rossato case in a unanimous decision which will serve as great relief to employers who now have a solid definition of what it is to be a 'casual worker'.

The High Court ruled that a casual is 'an employee who has no firm advance commitment from the employer as to the duration of the employee's employment or the days (or hours) the employee will work and provides no reciprocal commitment to the employer'.

Previously, the Federal Court had ruled that as mine worker Mr Robert Rossato was given regular, ongoing shifts up to a year in advance, he should have been classified as a permanent worker and awarded the associated benefits like annual leave and sick pay.

The Federal Court's decision left businesses open to claims from employees up to ‘double dipping’, ie: being paid benefits of a permanent worker as well as the 25 per cent leave loading offered to casuals.

The Australian Hotels Association (AHA) has welcomed the High Court’s unanimous decision reinstating the traditional interpretation of casual employment and delivering much-needed certainty for Australian hotels.

AHA CEO Stephen Ferguson said by the High Court setting aside the Federal Court’s previous ruling, employers were no longer facing tens of billions of dollars in unexpected wage costs.

Mr Ferguson said:

“This is great news for Australian employers and employees, as it confirms the traditional understanding of casual employment in Australia, where employees receive a higher rate of pay in lieu of leave entitlements.

“Importantly, the High Court’s decision provides employers with confidence at a time when they desperately need certainty. The previous Federal Court ruling, if upheld, would have delivered a staggering blow to employers and would have acted as a disincentive to hire new workers.

“As we continue to navigate the ongoing impact of COVID-19, the last thing employers needed was to have such a significant and costly upheaval of our industrial relations system.”