On 5 August 2021, the High Court handed down a long-awaited ruling regarding the benefits of casual employment.
The High Court has now overturned the earlier ruling by the Full Court of the Federal Court in Workpac Pty Ltd v Rossato [2020] FCAFC 84, in which the Full Court held that a casual employee, who had “agreed on employment of indefinite duration which was stable, regular and predictable”, could claim reimbursement for the same paid annual leave entitlements as permanent employees, pursuant to the National Employment Standards of the Fair Work Act 2009 (Cth) (‘Fair Work Act’).
The initial ruling by the Full Court was a significant decision in that it appeared that it would fundamentally change the way employees engage in casual work. Ultimately, the decision led to the Federal Parliament passing the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2021 (Cth), which would result in the largest overhaul of the provisions of the Fair Work Act since its inception.
What the High Court’s ruling means for employers?
The High Court’s ruling now clarifies what casual employment is and the benefits that come with it.
We recommend that employers ensure that:
- Casual employment contracts expressly state that the employment is on a casual basis.
- There is no advance commitment by the employer to the employee of permanent work. An employer providing regular and consistent shifts does not mean that there is an ongoing commitment to permanent work.
- The casual loading rate of 25 per cent is paid to casual employees, in lieu of annual leave entitlements, where applicable to the employment.
What the amendments to the Fair Work Act means for employers?
To ensure employers remain compliant with the provisions of the Fair Work Act, we recommend that employers:
- Review both current and future casual employment contracts so as to ensure that the contracts align with what constitutes ‘casual employment’ for the purposes of the Fair Work Act.
- Ensure that casual employees who have engaged in regular and systematic employment within the previous twelve months are offered conversion from casual employment to permanent employment.
- Provide the Casual Employment Information Statement to both new and existing casual employees on an annual basis.
If this article has raised any concerns for you or your organisation please do not hesitate to contact either John Hayward or Kate Smith on (07) 4046 1124, for advice specific to your circumstances.
This article was prepared with the assistance of Rhys Mapstone, law student.
If this article has raised any concerns for you or your organisation please do not hesitate to contact either John Hayward or Kate Smith on (07) 4046 1124, for advice specific to your circumstances.
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