On 20 May 2020, the Full Court of the Federal Court handed down a decision that will compound the risks for employers of casuals claiming annual leave and other entitlements of full-time employment. In the WorkPac v Rossato case, the Court considered arguments about the meaning of the expression ‘casual employee’ in the Fair Work Act 2009 (Cth) (FW Act) and also the ability for an employer to offset any annual leave loading paid against other entitlements that may be owed.

The WorkPac v Rossato case is separate to the WorkPac v Skene case which resulted in a very problematic decision of the Federal Court in 2018 in which the Full Court decided that the term ‘casual employee’ in the FW Act has no precise meaning and whether or not an employee is a casual for the purposes of the FW Act depends upon the circumstances surrounding the employee’s employment. The Court decided that the fact that an employee is engaged as a casual and paid a casual loading does not necessarily mean that the employee is a ‘casual employee’ for the purposes of the annual leave entitlements under the FW Act.

In its WorkPac v Rossato decision, the Full Federal Court held that Mr Rossato was entitled to annual leave payments despite the fact that he was engaged and paid as a casual. The Court has also rejected Workpac’s arguments that the additional compensation paid to Mr Rossato in the form of a casual loaded rate could be offset against the annual leave entitlements.

Law firms, backed by litigation funders, and the CFMMEU are pursuing a series of class actions against employers pursuing annual leave entitlements for a large number of casual employees. There may be an appeal to the High Court by WorkPac, and there has been a push from employer groups including Ai Group for legislative reform in this area.

If you would like more information about the engagement of casual employees in your business, please contact Ai Group’s Workplace Advice Service on 1300 55 66 77.

Alternatively, if you would like advice about structuring your employment arrangements please contact your local employment, workplace and industrial lawyer in Sydney, Newcastle, Wollongong, Adelaide, Melbourne or Brisbane or contact Ai Group Workplace Lawyers here.

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