WorkPac v Rossato decision and casuals

  • This week the full bench of the Federal Court handed down its decision in WorkPac v Rossato [2020] FCAFC 84 reconfirming that casual employees working regular and systematic hours with “predictable periods of working time” are likely to be considered permanent employees, regardless of their contract says and any casual loading paid.
  • The Federal Court ordered that WorkPac pay Mr Rossato unpaid annual leave, persona leave, compassionate leave and public holiday payment which are owing on the basis that he was in fact a permanent employee of Workpac and not as casual (as he was engaged).
  • Concerningly for employers although WorkPac claimed that it should be able to set-off the casual loading it had paid to Mr Rossato against any unpaid entitlement or in the alternative recover the mistaken casual loading paid all three justices rejected these claims finding the loading could not be utilised to reduce the amounts owning with respect to leave entitlements or public holidays and there was no obligation on the part of Mr Rossato to repay any loading incorrectly paid.
  • Given the ramification of this decision it is likely that it will be appealed to the High Court.
  • Following the decision ACCI issued a media release calling for urgent legislative action to address the uncertainty caused by WorkPac v Skene and now WorkPac v Rossato.
  • The Attorney-General has indicated he will consult with employer groups and unions to try to drive certainty into the system, and has said the government will consider intervening in any High Court appeal

It was always our intention that as soon as the decision was made that we would be consulting on what may or may not need to occur as a result of the decision.”

“…finding that path forward has to be about genuine consultation and I think negotiation between employer and employee groups….. part of that consultation negotiation has to be around what’s known as casual conversion. Now, for many casuals. There is a right, if they have been in the same position for a considerable period of time to request a conversion from casual to permanency – but that right is not universal. And it seems clear to the Government without anticipating any particular result inside 24 hours of the decision – that part of the negotiations and consultations that have to now occur on an urgent basis with employers and employees is around the issue of casual conversion and a greater clarity and certainty and universality to that right of request.”

We have to talk very quickly to business and to employee groups and understand whether or not the financial impact of this decision over the next six, nine, eighteen months actually puts businesses in jeopardy and if it does then we need to consider ways that we could strengthen businesses, so that we preserve jobs. Because if this decision were handed down six months ago it would have been a very, very different scenario. At the moment the greatest premium in the economy is employment, generating employment and saving jobs.”

  • ACCI and members have been closely engaged with the Government on the passage of these decisions since the original Federal Court finding in August 2018.  The Government is well aware of the concerns of business regarding:
  • Potential inaccessibility or unreliability of casual work.
  • The unfairness and impacts of employers being asked to pay twice for leave entitlements (the double dipping concern). 
  • The potential for extensive back pay claims.  
  • Potential for highly damaging class actions. 
  • ACCI will participate in any discussions with unions convened by the Attorney-General seeking clear and reliable solutions to these substantial concerns. 
  • Members may also be interested in the comments of the Shadow Minister for Industrial Relations in the wake of the decision (21 May 2020):

“…instead of dealing with wage theft, it deals with security theft. It deals with where people have had the job security they were legally entitled to taken from them.”

“if employers much more broadly than WorkPac have been acting in breach of the law, if they have been refusing to give employees the security that they were legally entitled to, then the last thing the Parliament should be doing is acting as a protection racket to cover for people who have broken the law.”

“Every Australian right now should be on the side of job security. And this decision says that when a business has not delivered on job security, then the law should step in. We shouldn’t be changing the law to let businesses that have broken it off the hook.”

“we have in front of us now is a clear message to every employer. You can’t just buy off job security. If you want the security of a permanent workforce then you have to treat them as permanent employees. You can’t just pay your way out of that and get off the hook. People have a right to job security just as employers have a right to a loyal workforce. And you can’t double dip and think that you’ll get the loyal workforce and not be able to have to provide the job security on the other side. You know there are some benefits that come with a fully flexible workforce. I get that. And you have to pay for them. But if you want the benefits of a loyal permanent workforce on long-term rosters then you owe your workforce some security too.”

“If Christian Porter wants to use the Parliament to provide a protection racket for employers who have broken the law then he can expect an argument. He can expect an absolute argument and very strong opposition from us. And if the government thinks after all the insecurity that people are living in Australia at the moment, that he wants to change the law to give people less job security – we’re there for that fight.

TAMSIN LAWRENCE
Deputy Director | Workplace Relations
 
Level 2, 
150 Collins Street Melbourne VIC 3000 
 
ABN 85 008 391 795 
D: +61 3 9668 9983 T: +61 408 586 151 
E: tamsin.lawrence@australianchamber.com.au 
W: www.australianchamber.com.au 

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