A recent Federal Court decision on a casual worker’s leave entitlements has significant implications for casual workers and businesses that rely on casuals. RMB Lawyers Partner and Compensation Division head CHRIS SHEPPARD explains:
In a recent landmark decision, the Full Court of the Federal Court of Australia has expanded the rights of casual workers who work regular and predictable shifts.
Mr Rossato was an experienced production employee at an open cut coal mine. He was employed by a labour hire company, WorkPac.
Mr Rossato worked for WorkPac over a period of nearly four years at a number of coal mines. During that time, he had six separate contracts of employment which classed him as a casual employee.
Being classified as a casual meant that Mr Rossato did not receive any paid annual leave, sick leave, compassionate leave, or public holidays and over the Christmas shut down periods. However, Mr Rossato was paid a 25% casual employment loading.
A dispute arose between Mr Rossato and WorkPac as to whether the actual nature of his employment meant that he was a permanent employee - rather than a casual employee - and whether he was entitled to the back payment of his leave entitlements.
Ultimately, the Court found that WorkPac had given him a “firm advance commitment” in terms of the work that it was going to provide to him and therefore the true nature of his employment was that of a full-time employee.
Under one of his contracts, Mr Rossato worked seven days on, seven days off with 12-hour shifts set in advance. The Court pointed out that that work was “regular, certain, continuing, constant and predicable” and is not consistent with that of a true casual employee.
Ultimately, the court found that Mr Rossato was entitled to the payment of annual, sick and carers leave during the course of the period that he worked for WorkPac.
Further, the Court found that although he was paid a 25% casual loading, WorkPac were not entitled to take that into account to offset the leave entitlements which it owed him.
The case is likely to have significant and immediate implications for many Australian businesses who rely upon a flexible casual workforce. It will require employers of casual workers to consider their relationship with those workers and to determine whether they are at risk of incurring liability for past and future leave entitlements.