Casu­al employ­ment: Lat­est devel­op­ments and where to from here?

It has been a big year for casu­al employ­ees, with the law with respect to who a casu­al employ­ee is, and what their enti­tle­ments are, appear­ing to be (final­ly) set­tled. Some key devel­op­ments in this space from the last week alone are sum­marised below.

Work­pac v Rossato

On Wednes­day, 4 August the High Court hand­ed down its long await­ed deci­sion in Work­pac Pty Ltd v Rossato [2021] HCA 23 on the cor­rect approach to deter­min­ing whether an employ­ee is a casu­al under the Fair Work Act 2009 (FW Act). The key issue is whether there exists a ​“firm advance com­mit­ment” to ongo­ing work (the absence of which typ­i­fies casu­al employ­ment). The Court said ref­er­ence must be had to the express terms of the employ­ment con­tract, and reject­ed the approach adopt­ed by the Full Court of the Fed­er­al Court in Work­Pac Pty Ltd v Skene (2018) 264 FCR 536 which said casu­al employ­ment is char­ac­terised by the con­duct of the par­ties and the ​“real sub­stance, prac­ti­cal real­i­ty and true nature of that rela­tion­ship”.

The High Court emphat­i­cal­ly reject­ed any sug­ges­tion the role of the judi­cia­ry is any­thing oth­er than to enforce legal oblig­a­tions, and in doing so rein­forced the pri­ma­cy of the employ­ment con­tract as the mech­a­nism for both under­stand­ing and enforc­ing the char­ac­ter of a legal rela­tion­ship between an employ­er and employee. 

In this case nei­ther Mr Rossato’s employ­ment con­tract (which express­ly pro­vid­ed his employ­ment was on an ​“assign­ment-by-assign­ment basis” and pro­vid­ed the abil­i­ty for him to reject, and for Work­pac not to offer, assign­ments), nor the fact he worked accord­ing to a ros­ter (which was pro­vid­ed up to a year in advance), demon­strat­ed a ​“firm advance com­mit­ment” to ongo­ing work. The High Court unan­i­mous­ly found Mr Rossato was a casu­al employee.

On Fri­day, 6 August a Full Bench of the FWC even con­sid­ered the impact of Work­pac v Rossato on the dis­tinc­tion between an employ­ee and an inde­pen­dent con­trac­tor; in par­tic­u­lar, obser­va­tions made by the High Court in rela­tion to the need to con­sid­er the ​“total­i­ty of the rela­tion­ship”. That Full Bench was con­sid­er­ing an appeal of Fran­co v Deliv­eroo Aus­tralia Pty Ltd [2021] FWC 2818, a deci­sion we report­ed on in our update Deliv­eroo case deliv­ers more uncer­tain­ty for the sta­tus of gig econ­o­my work­ers in which Com­mis­sion­er Cam­bridge made a find­ing that a Deliv­eroo deliv­ery rid­er was an employee. 

Reforms to mod­ern awards

On Tues­day, 3 August a 3 mem­ber Full Bench of the FWC launched the sec­ond stage of a major review it is cur­rent­ly under­tak­ing of casu­al terms in mod­ern awards. As report­ed in our update The Fair Work Com­mis­sion Kicks Off Review of Casu­al Terms in Mod­ern Awards, the FWC has until 27 Sep­tem­ber 2021 to con­sid­er whether a ​“rel­e­vant term” in a mod­ern award, as it relates to casu­al employ­ees, is con­sis­tent with the new def­i­n­i­tion of casu­al employ­ee and casu­al con­ver­sion pro­vi­sions in the FW Act (amend­ments made, inci­den­tal­ly, as a result of the approach of the Full Court in Work­pac v Skene). The scope of the amend­ments intro­duced by the Fair Work Amend­ment (Sup­port­ing Australia’s Jobs and Eco­nom­ic Recov­ery) Act 2021 (Cth) (Amend­ment Act) were con­sid­ered in our update, Casu­al Clar­i­fi­ca­tion Emerges From Omnibus Break­down.

The Full Bench has since issued State­ments ([2021] FWCFB 4714 and [2021] FWCFB 4928) with some pro­vi­sion­al views in respect of 2 of the 4 groups of mod­ern awards it has been charged with review­ing. In doing so, it has adopt­ed the rea­son­ing of a 5 mem­ber Full Bench in a deci­sion issued on 16 July 2021 that con­sid­ered ​“rel­e­vant terms” in an ini­tial group of 6 mod­ern awards and how they inter­act with the casu­al reforms. Some key obser­va­tions from the 16 July deci­sion include:

• The con­ven­tion­al ​“engaged as a casu­al” and ​“paid by the hour” type casu­al def­i­n­i­tions cre­ate uncer­tain­ty and are incon­sis­tent with the new statu­to­ry def­i­n­i­tion of casu­al employee;
• Claus­es that require casu­al employ­ees to be advised of their employ­ment sta­tus upon engage­ment, and casu­al load­ing pro­vi­sions that do not spec­i­fy the enti­tle­ments they are com­pen­sat­ing for, are gen­er­al­ly not incon­sis­tent with the new statu­to­ry def­i­n­i­tion of casu­al employ­ee (pro­vid­ed the def­i­n­i­tion in the mod­ern award aligns);
• Pro­vi­sions that spec­i­fy min­i­mum pay­ments and peri­ods of engage­ment for casu­als are not incon­sis­tent with the new casu­al pro­vi­sions (pro­vid­ed such pro­vi­sion are dis­tinct from the def­i­n­i­tion of casu­al employ­ment in the mod­ern award); and 
• The mod­el casu­al con­ver­sion clause in mod­ern awards is less ben­e­fi­cial, and there­fore incon­sis­tent, with the NES casu­al con­ver­sion provision. 

Inter­est­ed par­ties have until 18 August 2021 to pro­vide any respons­es to the pro­vi­sion­al views con­cern­ing Group 2 mod­ern awards.

Key take­aways

So what do these devel­op­ments mean for employ­ers? Well with 2.6 mil­lion casu­al work­ers in Aus­tralia (as at 2019) the answer is, a lot. There has nev­er been a bet­ter time for employ­ers to get their house in order and leave no room for uncer­tain­ty as to who a casu­al employ­ee is. To that end, it is rec­om­mend­ed that employers:

• Refresh their casu­al con­tracts (yes, casu­als should have writ­ten con­tracts!) to make sure it clear­ly reflects the fact there is no ​“firm advance com­mit­ment” to ongo­ing work and that casu­als are pro­vid­ed with a Casu­al Infor­ma­tion State­ment (now a require­ment under the NES);
• Keep in mind that employ­ers (oth­er than small busi­ness employ­ers) are now required to offer casu­al employ­ees who have been employed for at least 12 months, and who have worked a reg­u­lar pat­tern of hours on an ongo­ing basis for at least 6 months of that peri­od, con­ver­sion to per­ma­nent employ­ment. Such an offer is not required if there are ​“rea­son­able grounds” not to make the offer; and
• Avail them­selves of the tran­si­tion­al pro­vi­sions of the Amend­ment Act, which pro­vide scope for par­ties to an enter­prise agree­ment to apply to the FWC to resolve uncer­tain­ty relat­ing to the inter­ac­tion between the agree­ment and the new casu­al employ­ee definition.