The curious case of casual employment in Australia

Saul Harben, Alex Griffiths and Jesse Rutigliano
07 Jul 2022
Time to read: 2 minutes

Casual employment in Australia is primed for another set of changes with the inception of the Albanese Government.

In early 2021 a specific picture was forming as to how the law viewed casual employment in Australia.

First, in March 2021, the Morrison Government introduced a definition of "casual employee" under section 15A of the Fair Work Act 2009 (Cth) (FW Act), which focused on the offer and acceptance at the formation of the contract.

Then, in August 2021, the High Court handed down the decision of WorkPac Pty Ltd v Rossato [2021] HCA 23, in which the majority held that the true employment relationship can be found in the words of the written contract:

"To insist upon binding contractual promises as reliable indicators of the true character of the employment relationship is to recognise that it is the function of the courts to enforce legal obligations, not to act as an industrial arbiter whose function is to synthesise a new concord out of industrial differences."

Fast forward only 15 months and the Albanese Government has promised to amend section 15A of the FW Act in order to align the definition of a casual employee with the previous common law formulation, most recently applied in WorkPac Pty Ltd v Skene [2018] FCAFC 131 as the "absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work". This definition will be coupled with a statutory test to determine when a worker can be classified as casual.

While the specific ramifications of the Albanese Government’s amendments are not yet clear, it’s possible that in the very near future, there could be a shift away from the High Court’s decision in Rossato – thus overturning the principle that "contract is king".

However, in the interim, the decision and principles of Rossato are now being applied in the Fair Work Commission.

In recent weeks, there have been a number of Commission decisions surrounding the ability of casual employees to bring unfair dismissal claims pursuant to section 394 of the FW Act. Specifically, these decisions have dealt with jurisdictional objections around casual employees meeting the minimum employment period threshold pursuant to the tests outlined in sections 383 and 384 of the FW Act.

Section 384(2)(a) provides a two-limb test that a casual employee will need to satisfy in order for their period of service to count towards their period of employment:

  1. the employment as a casual employee was as a regular casual employee; and
  2. during the period of service as a casual employee, the employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis.

The decision in Rossato has been used to argue that the second limb of section 384(2)(a) cannot be satisfied where the contractual relationship between the parties contains a clause whereby the employee agrees that they do not have a reasonable expectation of continuing employment on a regular and systematic basis by agreement.

One example is the decision of Liting Gu v Geraldton Fishermen’s Co-operative [2022] FWC 1342, in which the Commission held that a casual employee of 14-months was not protected by the unfair dismissal regime due to a failure to satisfy section 384 of the FW Act.

In the decision, Commissioner Beaumont stated that the Applicant’s employment contract did not provide an "expectation" of continuing employment by the employer on a regular and systematic basis.

Key takeaways for employers with casual employees

Currently there is no timeframe on the Albanese Government’s proposed changes to the definition of "casual employee". However, in the interim, we recommend employers undertake a review of their current casual engagement practices (inclusive of their contracts of employment) to ensure the following:

  • all legal obligations in respect of casual employees are being adhered to (eg. payment of casual loading);
  • clear articulation that the employment relationship is casual and there is no reasonable expectation of continuing employment; and
  • each casual engagement stands alone and is subject to the requirements of the employer.

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