Casual Staff – Why WorkPac vs Rossato Matters and how it could impact your business?

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Read on to find out more about WorkPac vs Rossato – casual staff, who it affects and how it may impact your business.  The decisions surrounding the original WorkPac case have been hovering over businesses for several years. In my last role, a client asked what we were planning to do regarding the previous decision, WorkPac vs Skene, which ruled that casual loadings may still accrue permanent employment benefits. At that time, most workforce management providers were waiting for a response to an appeal and the outcome of WorkPac vs Rossato.

We all received the response a fortnight ago with the ruling, so below is a summary of the ruling along with a few steps a business could be taking to reduce their risk and how to calculate the potential liability.

The claim in WorkPac vs Rossato by Mr Rossato was that he was not a casual employee and was entitled to paid annual leave, paid personal, and carers leave, paid compassionate leave and public holiday entitlements per the Section 86, 95 and 116 of the Fairwork Act. The Federal Court ruled in favour of Mr Rossato based on two key areas:

  1. A Firm Advance Commitment
  2. Characterisation of Casual Employment

The Federal Court looked to establish the concept of a firm advance commitment and in turn, established the characterisation of a casual.

The Federal Court looked towards the definition of full time and part-time employment as characterised by the Fair Work Act. The definition of a full-time and part-time employee was a “commitment given by the employer to provide the employee with continuous and indefinite work according to an agreed pattern of work”.

While the definition of a long-term casual employee is listed in the Fair Work Act, a definition of a casual is not listed, and the Federal Court took the definition of a casual as having “no firm advance commitment from the employer to continuing and indefinite work according to an agreed pattern of work”.

For most businesses, where work is time-based and rostered in advance, meaning an employee works a regular and consistent fixed pattern, a portion of the definition of a “firm advance commitment” is met.

What does it mean to be a casual, though?

As most casual employees are contracted as ‘casuals’, the Federal Court ruled that casual employment should be characterised not by the contract but by the engagement that is being worked. In short, if I’m a casual that works consistent shifts every week than I may no longer be casual.

Due to the above, the Federal Court ruled that Mr Rossato was, in fact, a permanent employee and not a casual and therefore was due leave entitlements.

Who does this affect

This is a good question and there is no clear answer.  If you employ Casual staff you should at least be aware of the issue and follow the steps below to gain a clear understanding.

Research from Roy Morgan identified that this could potentially affect 794,000 businesses.  Their recent survey of 881 Australian businesses indicated that over a third (34.5%) were likely to be affected by the Federal Court’s ruling on the entitlements of casual employees.

They also highlighted that The Federal Court ruling on casual employees is set to have a disproportionate impact on some industries such as; Transport, Postal & Warehousing (59% affected), Wholesale (54.5%), Manufacturing (47%), Retail (45.5%) and Agriculture (40%) as well as hospitality – where casual employment may be as high as 80%.

What does this mean in practice?

I’d recommend that employers take a few steps to ensure they understand how they wish to proceed.  Indeed some employers may actively promote casual employees being made permanent.  Others may choose to more tightly maintain a casual workforce and many will want to calculate the potential increased liability on their payroll.  Whichever camp you are in, as an employer with a casual workforce you should at least:

1. Review your rostering practices.  It’s time to go back and look at rostering practices and forecasting models and understand why, as a business, you use particular types of staff at certain times and if this still meets your business objectives. It’s also an excellent opportunity to educate staff on other requirements within the enterprise agreement or award and to ensure you have the necessary controls and processes in place to maintain your desired position on Casual employees.

The Tambla consulting team places a significant emphasis on understanding rostering practices and decision making – getting to the bottom of why managers utilise staff in particular ways across a business. Tambla is also able to use our Workforce Planning tools to review and make recommended changes to the labour mix to ensure an efficient balance between full time, part-time and casuals.

2. Update your workforce planning platforms – If you are utilising workforce management or time and attendance solutions for rostering, discuss with your vendor how to randomise the allocation of casual staff. Within the Tambla suite of products, we have various solutions from randomisation via auto-assign for casual staff, round-robin type allocation with least utilised allocated first or a variation model to rotate staff from previous shifts.

While you’ve systemised the rotation of casual staff to assist in reducing the risk for your business, update your solution to match the feedback from the rostering practices review to ensure your solution is aligned with newly defined practices and your current business objectives.

3. Review your Enterprise Agreement or award.  Some Enterprise agreements or awards contain clauses to determine what eligibility exists to migrate a casual employee to a part-time employee. This is a clause that is worth understanding.

4. Understand your Liability.  The Tambla Insights team are currently working on a range of reporting and dashboard requirements to help identify and calculate the potential liability your business may be exposed to as well as insight into future potential conversion rates.

If you’d like to discuss any of these points – or would like to understand more about Casual Staff, Workpac vs Rossato and your business, please reach out, and we’ll be in contact to determine whether Tambla can assist you.

 

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