Business structures


31 Aug 2021

Latest clarity on casual v permanent employees


3 min

Don’t be casual about employee contracts!

Last year I wrote about how industrial relation laws were developing, with the government attempting to (rather ambitiously) overhaul workplace rights and conditions against the backdrop of COVID-19’s economic instability. At the same time, the judicial system made a decisive call around the ongoing saga: casual versus permanent employee in the matter of WorkPac Pty Ltd v Rossato [2020] FCAFC 84 (Rossato). This year, these two issues appear to have intersected in a way probably not intended nor anticipated.

In Rossato, Robert Rossato was employed as a casual worker by WorkPac, however he claimed to be a permanent employee and therefore entitled to annual leave and other benefits. The Full Federal Court sided with this employee, considering post-contractual conduct, which included successive contracts and rosters compiled up to a year in advance. The Full Federal Court also rejected WorkPac’s argument that if Rossato was not a casual employee, that the casual loading paid to him over the years be “set off” against any permanent employee entitlements owed, to effectively avoid any ‘double dipping’. The decision gave employers little confidence already operating in a minefield like the industrial relations framework. WorkPac challenged the decision and the High Court granted leave to appeal.

Prior to the High Court decision being handed down, the government’s much anticipated workplace law reforms from round table discussions with business and unions fizzled away in the hands of politics. However, in March 2021, the government did pass laws finally defining ‘casual employment’, with the key factor being whether the employer makes and the employee accepts: no firm advance commitment that work will continue indefinitely with an agreed pattern of work. In a direct contradiction to the Rossato decision, Fair Work’s information statement[1] on the new laws clearly states that an employee status is assessed at the time the job is offered and accepted, not by way of the parties’ subsequent conduct.

It came at little surprise when (on 4 August 2021) the High Court overturned the Full Federal Court Rossato decision and ultimately ruled Rossato was a casual employee, in line with the definition and criteria from the recent legislative change[2]. Despite the High Court decision perhaps losing its ‘landmark’ decision status, it has led to unintended consequences, potentially impacting the employee versus contractor issue the High Court is considering in the matters of Jamsek v ZG Operations Australia Pty Ltd [2020] FCAFC 119 (Jamsek); and, Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2020] FCAFC 122 (Personnel Contracting). If the High Court in those matters was so minded following the Rossato principles, then the initial contractual terms are likely to take precedence over a review of subsequent conduct over the whole relationship between contracted parties. A decision along those lines will be sure to go a long way in giving clarity to employers—desperately needed during already such great uncertain times.

At Worrells, we deal with a full range of businesses vulnerable to insurmountable debts crystalising from misunderstanding or misapplying worker designations. On that note, this recent Fair Work audit illustrates how important it is to get worker designations correct. That audit culminated into a $49k plus fine and underpayments of $57k plus now owing to workers.

Your local Worrells partner is here to help. Contact us for a complimentary and confidential discussion.


[2] Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021

Business can be tough

Our team is focused and ready to help

Get in touch

Subscribe for all the latest help and news