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Federal Court milestone decision regarding casual employees and their leave entitlements

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By Renee Karakinos, Lawyer, and Chao Ni, Principal

In August 2018, a Full Federal Court unanimously determined that a casual labour hire worker was a permanent employee, and therefore was entitled to paid leave entitlements under the National Employment Standards (NES) (WorkPac Pty Ltd v Skene [2018] FCAFC 131). However, the Full Federal Court in Skene did not conclude whether the casual loading could be offset against annual leave payment entitlements awarded by the Court.

Accordingly, on 4 October 2018, Workpac Pty Ltd filed a separate application in the Federal Court seeking a declaration that another casual employee, Mr Robert Rossato, could not make claims with respect to paid annual leave, personal/carer’s leave, and compassionate leave entitlements under the NES because he was a casual employee within the meaning of s 86, 95 and 106 of the Fair Work Act 2009 (Act).

MST has previously written articles on both WorkPac cases. Please read our Employment Law Update – Summer 2020 and our Article titled “When is a casual employee really a casual?

On 20 May 2020, the Federal Court determined that Mr Rossato was entitled to “double dip” by claiming both permanent employee entitlements and casual loadings (WorkPac Pty Ltd v Rossato [2020] FCAFC 84).

In the proceedings, WorkPac sought to rely on regulation 2.03A of the Fair Work Regulations 2009 which was introduced as a consequence of the Skene decision.

However, this position was rejected by the Federal Court on the basis that the regulation can apply only when the person makes a claim to be paid an amount in lieu of one or more of the relevant NES entitlements. In this case, Mr Rossato sought payment of the NES entitlements, not payment in lieu of those entitlements, and therefore the regulation could not apply.

In summary the Federal Court concluded that:

  1. in Mr Rossato‘s employment under 6 consecutive employment contracts over almost four years until April 2018, Mr Rossato was ‘other than a casual employee’ for the purposes of the Fair Work Act 2009 and not a casual field team manager under the WorkPac 2012 Enterprise Agreement (EA);
  2. Mr Rossato is entitled to the entitlements that he claimed under the Act and the EA with respect to paid annual leave, paid personal/carer’s leave paid compassionate leave and payment for public holidays; and
  3. WorkPac is not entitled to set off ́against its liabilities any of the payments made under the six contracts of employment.

As can be expected, the Rossato decision has been welcomed by union bodies and slammed by employer associations with the Morrison Government flagging the necessity for legislative change.

Notably, the incongruous legal drafting of regulation 2.03A (claims for payment of NES entitlements vs payment in lieu of NES entitlements) can be expected to be amended.

In light of the Rossato decision, all employers should review all of their casual employment agreements, and seek legal advice on their exposure to legal risk.

For any questions in relation to the content of this article, please contact the MST Lawyers’ Employment Law Team on + 61 3 8540 0296 or workplace@mst.com.au