FEDERAL COURT OF AUSTRALIA

WorkPac Pty Ltd v Rossato [2018] FCA 2100

ORDERS

1.    The Chief Justice directs that under s 20(1A) of the Federal Court of Australia Act 1976 (Cth) the jurisdiction of the Court in this matter be exercised by a Full Court.

THE COURT ORDERS THAT:

2.    Leave be granted to the Minister for Jobs and Industrial Relations and the Construction, Forestry, Maritime, Mining and Energy Union to intervene in the proceeding subject to their own risk as to costs.

3.    The application of Paul Alexander Skene to intervene be stood over to the hearing of the matter.

4.    The proceedings be expedited for hearing as soon as practicable after the Full Court sittings in February 2019 are over.

5.    The proceeding be remitted to Justice Bromberg for case management.

REASONS FOR DIRECTION AND JUDGMENT

ALLSOP CJ:

1    Before the Court is an interlocutory application by the applicant for a direction to be made by me under s 20(1A) of the Federal Court of Australia Act 1976 (Cth) (the FCA Act) that the jurisdiction in the matter be heard by a Full Court.

2    Directions of this kind in listings are not customarily attended by the detail or formality as has occurred here. That is not a criticism of the parties or the interveners who have provided me with their views. The matter is one of some public importance. These should not be seen as reasons for formal orders, but an explanation for my decision.

3    The application and the debate arise out of a Full Court decision of 16 August 2018, WorkPac Pty Ltd v Skene [2018] FCAFC 131, that dealt with s 86 of the Fair Work Act 2009 (Cth) and the meaning and content of the phrase “casual employees”. In that appeal, the Full Court found that Mr Skene was a casual employee. That involved dealing with the facts of his employment (to use that word generally). At the centre of this controversy was the question whether there was a firm advance commitment as to Mr Skene’s employment. The Full Court said the following at [177] to [192]:

177    The discussion has sought to emphasise that, in their ordinary conceptions, casual employment and full-time and part-time employments are mutually exclusive categories of employment. An employee cannot be both a casual employee and full-time or part-time employee at the same time in the same employment. The features that distinguish one from the other are important to bear in mind in the characterisation process.

178    It is also necessary to bear in mind that employment arrangements may change during the course of an employment. What is agreed to at the commencement of an employment is relevant to the characterisation process, but an employment which commences as casual employment may become full-time or part-time because its characteristics have come to reflect those of an on-going part-time or full-time employment.

179    As Buchanan J said in Ledger at [62]:

It must be accepted that, over time, repetition of a particular working arrangement may become so predictable and expected that, at some point, it may be possible to say that what began as discrete and separate periods of employment has become, upon the tacit understanding of the parties, a regular ongoing engagement (for an example of historical interest, see Cameron v Durning [1959] AR (NSW) 142).

180    The conduct of the parties to the employment relationship and the real substance, practical reality and true nature of that relationship will need to be assessed. This is now the settled approach to the question of whether a person is an employee: see Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37 at [142] (North and Bromberg JJ) citing R v Foster; Ex parte The Commonwealth Life (Amalgamated) Assurances Limited (1952) 85 CLR 138, at 151 and 155 (Dixon, Fullagar and Kitto JJ); Vabu at [24], [47], [57], [58] (Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ); ACT Visiting Medical Officers Association v Australian Industrial Relations Commission (2006) 232 ALR 69 at [25] and [31] (Wilcox, Conti and Stone JJ); Damevski v Giudice (2003) 133 FCR 438 at [77]–[78] (Marshall J, with whom Wilcox J agreed) and [144], [172] (Merkel J); Dalgety Farmers Ltd t/as Grazcos v Bruce (1995) 12 NSWCCR 36 at 46–48 (Kirby ACJ, with whom Clarke and Cole JJA agreed); Autoclenz Ltd v Belcher [2011] 4 All ER 745 at [22], [25]–[26], [29]–[32] (Lord Clarke SCJ, with whom Lord Hope DP, Lord Walker, Lord Collins and Lord Wilson SCJJ agreed). See also ACE Insurance Ltd v Trifunovski (2011) 200 FCR 532 at [29] (Perram J); and on appeal ACE Insurance Ltd v Trifunovski (2013) 209 FCR 146 at [93] and [102] (Buchanan J, with whom Lander and Robertson JJ agreed). In such an assessment “the nature of the relationship may be legitimately examined by reference to the actual way in which the work was carried out”: Ace Insurance at [91]. The same approach is appropriate to adopt in determining the nature of the employment relationship. It is the approach adopted in MacMahon (at [38]) and apparent from the reasoning in Reed (at 424), Hamzy (at [38]), Melrose Farm (at [101]-[105]), Bernardino ([18]-[23]), Ledger (at [62] and [65]) and South Jin (at [138]-[152]) discussed above and also CPSU, Community & Public Sector Union v State of Victoria (2000) 95 IR 54 at [10] (Marshall J). In Reed, Moore J at 424 said this:

The characterisation of Reed's employment by either Reed and/or representatives of the Company generally or in a document, and the provisions of the Award, are simply matters to be taken into account in determining the true character of the employment.

181    Whether the requisite firm advance commitment to continuing and indefinite work (subject to rights of termination) is absent or present must be objectively assessed including by reference to the surrounding circumstances created by both the contractual terms and the regulatory regime (including the FW Act, awards and enterprise agreements) applicable to the employment.

182    The payment by the employer and the acceptance by the employee of a casual loading, like the description of the type of employment given by the parties in their contractual documentation, speaks to the intent of the parties to create and continue a casual employment. But the objective assessment will need to consider whether that intent has been put into practice and if achieved, has been maintained. The objectively demonstrated existence of a firm advance commitment to continuing and indefinite work (subject to rights of termination) according to an agreed pattern of work will ordinarily demonstrate a contrary intent and the existence of on-going full-time or part-time employment rather than casual employment. The key indicators of an absence of the requisite firm advance commitment will be irregularity, uncertainty, unpredictability, intermittency and discontinuity in the pattern of work of the employee in question. Those features will commonly reflect the fact that, whilst employed, the availability of work for the employee is short-term and not-ongoing and that the employer’s need for further work to be performed by the employee in the future is not reasonably predictable.

183    In this case, the primary judge found (at [85]) that the essence of casual employment as described in Hamzy (and applied in MacMahon) was missing in relation to Mr Skene’s employment. His Honour did so having found (at [81]) that Mr Skene’s pattern of work was “regular and predictable”, “continuous” and “not subject to significant fluctuation” in circumstances where “there was plainly an expectation that Mr Skene would be available, on an ongoing basis, to perform the duties required of him in accordance with his roster” (set 12 months in advance).

184    WorkPac’s contention that the primary judge erred because what he regarded to be the essence of casual employment cannot be the essence of casual employment under the FW Act must be rejected. Nor, was there any error in the primary judge’s reliance upon the regularity, predictability, certainty and continuity of the pattern of Mr Skene’s work.

185    Whilst the contention does not seem to have been raised before the primary judge, that the primary judge did not treat the payment of a casual loading to Mr Skene as a determinative factor of casual employment, is not demonstrative of error.

186    WorkPac also contended that a relevant factor was that both it and Mr Skene had considered that Mr Skene was in casual employment. We agree that that was a relevant factor. At [82], the primary judge took that factor into account.

187    Furthermore, WorkPac contended that the fact that the WorkPac Agreement defined or described Mr Skene as a casual employee was “highly relevant if not determinative”. We agree that if the Agreement had defined or described Mr Skene as a casual employee, for the purposes of s 86 of the FW Act, that fact would have been a relevant factor to be taken into account just as a designation in a contract would be a relevant factor. However, as we later determine, the Agreement did not define or describe Mr Skene to be a casual employee. There is no error in the primary judge having had no regard to that factor.

188    Further, WorkPac contended that Mr Skene was engaged by the hour and that that was a relevant factor. While that may be a relevant factor in some circumstances, it is “not a necessary characteristic of casual employment that the employee work under a series of separate and distinct contracts of employment each entered into for a fixed period” (Melrose Farm at [106]). Further, as McTiernan J said in Doyle at 565, “[e]ngagement at an hourly rate is not a criterion of casual employment as distinct from regular employment”.

189    In any event, WorkPac’s contention faces two hurdles neither of which are overcome. First, the contention that Mr Skene was engaged by the hour was made on the basis that Mr Skene was a “casual FTM” under the Agreement. We have determined that he was not and also determined (at [224]) that cl 5.6.1 does not, on its proper construction, envisage hourly employment; that is, cl 5.6.1 does not envisage that an employee is separately contracted for each hour of work. Second, the primary judge made a factual finding, not challenged by the ground of appeal, that Mr Skene was not engaged “by the hour” (at [54]).

190    The second contention relies on the erroneous proposition that Mr Skene was designated to be a casual employee under the Agreement. However, the primary judge (at [82]) took into account that Mr Skene was paid by the hour and that (at [54]) even if Mr Skene had been engaged by the hour, that would not necessarily mean that he was a casual employee even for the purposes of the Agreement.

191    Lastly, WorkPac contended that a relevant factor was that Mr Skene’s employment could be terminated on an hour’s notice. The submission being that termination on an hour’s notice is indicative of casual employment. Again, while we accept that termination on very short notice may be a relevant factor (MacMahon at [42]), it is not a factor necessary indicative of casual employment. Subject to any regulatory restriction, contracting parties are free to provide for termination on short notice for any kind of employment. In any event, the primary judge (at [82]) took into account that Mr Skene’s employment was terminable on an hours’ notice. There was no error in the primary judge not regarding that factor as determinative or giving it any more significance than he did.

192    For all those reasons, WorkPac’s alternative challenge to the judgment of the primary judge that Mr Skene was entitled to annual leave under the FW Act must be rejected. As WorkPac has failed on both its primary and alternative challenges, its appeal must be dismissed.

4    It is important to understand that the statement of principle as expressed in [180] was obiter and not the subject of any substantive challenge in Skene by counsel (highly experienced senior counsel). WorkPac now seeks to challenge legal propositions contained within [180]. Senior counsel (different to senior counsel who ran Skene) now wishes to challenge a point that he accepts was conceded below. That point is whether the status of casualness for the purpose of s 86 is a question of characterisation considering all the aspects of the work relationship or a question of construction of the employment contract. That way of putting the matter by senior counsel in this application may overlook, with respect, the possible complexities of proper factual analysis. What a contract states at the commencement of an employment relationship is one thing, it may be another if it is administered in a particular way. It may be that over time, and through conduct, the contract is varied. This “characterisation” may just be seen as the fluid variation of the contract, in practice. Thus, I am far from convinced that the binary analysis of counsel is, or will be in the long term, helpful or determinative.

5    Mr Rossato and WorkPac have agreed a statement of facts to form the basis of the resolution of the dispute. There are no pleadings filed.

6    Four parties sought to intervene in these proceedings. The first, the Minister for Jobs and Industrial Relations, supported WorkPac’s application. The second and third, the Construction, Forestry, Maritime, Mining and Energy Union (the CFMMEU) and Mr Skene, were jointly represented. They put no clear submission why the matter should not be heard by a Full Court; though they cast doubt on the utility of the process. They sought to intervene, in any case, before the Full Court. The fourth was an informal application made by Adero Law on behalf of a lead plaintiff in a prospective representative action (to be filed) under Pt IVA of the FCA Act in relation to underpayment of wages or attendant entitlements, for a defined class consequent upon applying the conclusion in Skene to the class generally. This application to intervene has now been abandoned.

7    Given the importance of the issue generally, I consider it sufficiently important and appropriate to give a direction that the jurisdiction of the Court be exercised by a Full Court.

8    I also propose to order expedition with a view to the matter being given a hearing as soon as reasonably practicable after the February Full Court period.

9    I propose to remit any further case management of the matter to Bromberg J.

10    I propose to permit the application for intervention by the Minister and the CFMMEU. One consequence, it seems to me, of the public importance of the matter urged on me by WorkPac and the Minister, is that the CFMMEU, as the organisation representing workers such as Mr Rossato and Mr Skene, has a clear and legitimate interest in ensuring that all relevant points are made in the litigation, just as does the Minister. Mr Skene’s interests are not so clear. He has won his case. I will stand his application for intervention over to the hearing.

11    One final matter is that Adero Law on behalf of Mr Beau Daniel Meaney (a former employee of WorkPac) appeared at the case management hearing. I have had regard to the content of correspondence from that firm.

12    Should the Court (either Bromberg J or the Full Court) come to the view that the exercise of jurisdiction by a Full Court is or has become inappropriate, the question of the appropriateness of revocation of the direction can be broached.

Associate:

Dated:    21 December 2018