Written contracts play a role in determining employee rights: MinterEllison

The firm's work on WorkPac v Rossato highlights how employers need to write contracts carefully

Written contracts play a role in determining employee rights: MinterEllison

The result of WorkPac v Rossato has increased certainty regarding the role played by written contracts in determining employee rights, MinterEllison said.

In ruling on the recent landmark case, the High Court clarified important parameters surrounding casual employment and reiterated the significance of written contracts in governing employment relationships. The firm, which acted for the second respondent in the case, noted that future cases would be decided with reference to the principles discussed in WorkPac v Rossato.

“The courts will still be able to review particular circumstances to determine whether the written contract in fact reflects the agreement between the parties, or whether it is a ‘sham’,” partner Dan Williams and special counsel Briony Pole wrote in a post on MinterEllison’s website.

That said, Williams and Pole reiterated that the decision “has made a clear statement that the need for certainty is to be given significant weight when dealing with issues affecting the relationship between employers and workers.”

WorkPac v Rossato concerned production worker Robert Rossato, who was employed by labour hire company WorkPac between July 2014 and April 2018. Throughout his employment, WorkPac defined Rossato as a casual employee. Upon retiring, Rossato submitted that given his stable and predictable employment (which was governed by a roster often published at the start of each year), he was not a casual employee in practice and was thus entitled to accrued leave payments.

Rossato relied on the 2018 decision of WorkPac Pty Ltd v Skene, where the Full Federal Court held that, based on the “totality” of the circumstances, Skene was not a casual employee and was entitled to accrued leave payments. 

Rossato was initially successful, with the Full Federal Court finding that he was not a casual employee under the legislation.

“While Bromberg J preferred the ‘totality’ of circumstances approach in Skene, White and Wheelahan JJ took an approach that focused on the contract itself,” Williams and Pole wrote. “However, their Honours accepted that Mr Rossato’s contract was not wholly in writing and they took into account factors external to the contract (including the provision of the rosters) to find that Mr Rossato’s employment lacked the informality, irregularity and uncertainty that is a hallmark of casual employment.”

The High Court shot down this approach and noted the significance of express terms in the employment contract, stating that express terms “must be given effect unless they are contrary to statute.”

“The court found that the express terms of the contractual arrangement were directly inconsistent with the existence of a firm advance commitment of ongoing employment,” Williams and Pole explained.

The court placed limited weight on the significance of WorkPac’s rostering system, finding that Rossato’s employment took on an “assignment-by-assignment” nature.

“While Rossato might fairly be said to have had, over time, a reasonable expectation of continuing employment on a regular and systematic basis, that was not a firm advance commitment to continuing employment beyond the particular assignment,” the court said.

Williams and Pole noted that “much of the uncertainty and difficulty caused by Skene was addressed by the Government’s introduction of a statutory definition of casual employment (now contained in s 15A of the FW Act).”

The lawyers outline the components of “a true casual employment contract” as follows:

  • the employer does not make any firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the employee, and the employee accepts this term
  • employees will be paid a casual loading; the base pay rate and loading should ideally be expressly indicated
  • the casual loading is paid in lieu of all entitlements that would otherwise apply if the employee were not a casual
  • the contract is completely in writing and represents the full bargain between employer and employee

“The statutory definition will otherwise apply retrospectively to the overwhelming majority of employees,” Williams and Pole wrote. “It will therefore be important that employers review their casual employment contracts to ensure that the elements of the definition are satisfied.”

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