Grounds 5 and 6: employment status grounds
104 Grounds 5 and 6 contend that the primary judge erred in concluding that the appellant was a casual employee. These grounds are complicated by the manner in which the trial proceeded before the primary judge. The appellant filed his application on 24 June 2019 and the trial commenced on 17 February 2020. As explained by the primary judge, there were several adjournments, some caused by the impact of restrictions that were necessary in response to the COVID-19 pandemic. Ultimately, the trial resumed on 10 May 2021, final submissions were provided by the parties on 14 June 2021 and the primary judge published his reasons on 7 July 2021.
105 For the entirety of this period, the decisions of this Court in WorkPac Pty Ltd v Skene (2018) 264 FCR 536; [2018] FCAFC 131 (Skene) and WorkPac Pty Ltd v Rossato (2020) 278 FCR 179; [2020] FCAFC 84 (Rossato (FC)), amongst others, determined that the correct approach to the question of whether a person is a casual employee within the meaning of ss 86, 95 and 106 of the FWA required an objective analysis of the entirety of the relationship between the employer and the employee. That included analysing the course of dealing between the parties, and was not limited to the written terms of the contract of employment, to determine whether in substance the employee lacked a "firm advance commitment from the employer to continuing and indefinite work according to an agreed pattern of work": Skene (at [172] per Tracey, Bromberg and Rangiah JJ). In the view of this Court in Skene (at [173]):
The indicia of casual employment referred to in the authorities - irregular work patterns, uncertainty, discontinuity, intermittency of work and unpredictability - are the usual manifestations of an absence of a firm advance commitment of the kind just discussed. An irregular pattern of work may not always be apparent but will not necessarily mean that the underlying cause of the usual features of casual employment, what Hamzy identified as the "essence of casualness", will be absent.
106 In Rossato (FC), this Court endorsed that approach and rejected the submissions put to it by WorkPac Pty Ltd to the effect that the question of a firm advance commitment in the case of a written contract was to be determined by reference only to its terms. The Court preferred to approach the question by an analysis of "the real substance, practical reality and true nature of the relationship": at [622]-[630] per White J.
107 The High Court granted special leave to appeal Rossato (FC) on 26 November 2020. For reasons published on 4 August 2021, the High Court allowed the appeal, set aside the orders made by this Court, declared that Mr Rossato was at all material times a casual employee for the purposes of ss 86, 95 and 106 of the FWA and overruled the decision in Skene: WorkPac Pty Ltd v Rossato (2021) 392 ALR 39; [2021] HCA 23 (Rossato (HC)).
108 In Rossato (HC), each party accepted that the expression "casual employee" in the FWA "refers to an employee who has no firm advance commitment as to the duration of the employee's employment or the days (or hours) the employee will work" (at [32] per Kiefel CJ, Keane, Gordon, Edelman, Steward and Gleeson JJ). That formulation was adopted from Skene (at [153]) and Hamzy v Tricon International Restaurants (2001) 115 FCR 78; [2001] FCA 1589 (at [38] per Wilcox, Marshall and Katz JJ). Expressly, their Honours (at [66]-[67]) rejected the approach of this Court in Skene as erroneous:
[66] In light of this discussion, it should now be understood that in approaching the characterisation exercise by reference to "[t]he conduct of the parties to the employment relationship and the real substance, practical reality and true nature of that relationship", the Full Court in Skene strayed from the orthodox path.
[67] None of the authorities cited by the Full Court in Skene in support of its approach to the characterisation exercise were cases where the parties had committed the terms of the employment relationship to a written contract and thereafter adhered to those terms. In such a case, it is to those terms that one must look to determine the character of the employment relationship. WorkPac's submission that Skene was wrongly decided in this respect should be accepted.
(citations omitted.)
109 It is important to understand that Mr Rossato signed a written contract of employment pursuant to which he expressly acknowledged that he had read, understood and agreed to be bound by a further document, which expressed the general conditions of his employment in comprehensive detail. Although he submitted in the High Court that certain terms in his contract were ambiguous, which justified reference to the manner in which the parties performed the contract, that submission was not pressed by reference to any identified ambiguity, nor was it submitted on his behalf that the written contract was a sham, should not be given effect according to its terms or that the contract was partly written, partly oral and/or partly to be implied: Rossato (HC) (at [54]-[55]). Later in these reasons, I return to these considerations, noting that in this case the contract of employment was oral and somewhat vague.
110 There is a further complication. The FWA was amended with effect from 27 March 2021 by the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Act 2021 (Cth) (Amendment Act) which, relevantly for present purposes, inserted s 15A to provide:
15A Meaning of casual employee
(1) A person is a casual employee of an employer if:
(a) an offer of employment made by the employer to the person is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person; and
(b) the person accepts the offer on that basis; and
(c) the person is an employee as a result of that acceptance.
(2) For the purposes of subsection (1), in determining whether, at the time the offer is made, the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person, regard must be had only to the following considerations:
(a) whether the employer can elect to offer work and whether the person can elect to accept or reject work;
(b) whether the person will work as required according to the needs of the employer;
(c) whether the employment is described as casual employment;
(d) whether the person will be entitled to a casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument.
Note: Under Division 4A of Part 2‑2, a casual employee who has worked for an employer for at least 12 months and has, during at least the last 6 months of that time, worked a regular pattern of hours on an ongoing basis may be entitled to be offered, or request, conversion to full‑time employment or part‑time employment.
(3) To avoid doubt, a regular pattern of hours does not of itself indicate a firm advance commitment to continuing and indefinite work according to an agreed pattern of work.
(4) To avoid doubt, the question of whether a person is a casual employee of an employer is to be assessed on the basis of the offer of employment and the acceptance of that offer, not on the basis of any subsequent conduct of either party.
(5) A person who commences employment as a result of acceptance of an offer of employment in accordance with subsection (1) remains a casual employee of the employer until:
(a) the employee's employment is converted to full‑time or part‑time employment under Division 4A of Part 2‑2; or
(b) the employee accepts an alternative offer of employment (other than as a casual employee) by the employer and commences work on that basis.
111 Additionally, the Amendment Act, as explained by the High Court in Rossato (HC) (at [10]) and with certain exceptions, applies retrospectively by operation of clause 46 of schedule 1 to the FWA:
46 Application of certain amendments
(1) Section 15A of the amended Act applies on and after commencement in relation to offers of employment that were given before, on or after commencement.
(2) Subclause (1) does not apply in relation to a person who is an employee of an employer as a result of accepting an offer that was made before commencement if either of the following apply in relation to that person:
(a) a court made a binding decision before commencement that the person is not a casual employee of the employer;
(b) the person converted the employment before commencement to employment other than casual employment under a term of a fair work instrument or contract of employment.
(3) In addition to subclause (1), section 15A of the amended Act (and the amendment made by item 1 of Schedule 1 to the amending Act) also applies before commencement in relation to offers of employment that were given before commencement, unless either of the following apply in relation to a person who is or was an employee of an employer as a result of accepting the offer:
(a) a court made a binding decision before commencement that the person is not a casual employee of the employer;
(b) the person converted the employment before commencement to employment other than casual employment under a term of a fair work instrument or contract of employment.
(4) To avoid doubt, if, apart from subclause (3), an employee could have made a claim for accrued relevant entitlements (within the meaning of subsection 545A(4) of the amended Act), the effect of that subclause is that the employee has not accrued, and cannot make a claim for, those entitlements.
(5) Subject to clause 47, Division 4A of Part 2‑2 of the amended Act applies in relation to periods of employment starting before, on or after commencement.
(6) Section 545A of the amended Act applies in relation to entitlements that accrue, and loading amounts paid, on or after commencement.
(7) In addition to subclause (6), section 545A of the amended Act also applies in relation to entitlements that accrue, and loading amounts paid, before commencement.
(8) To avoid doubt, section 545A of the amended Act applies:
(a) to periods of employment starting before, on or after commencement (regardless of whether the employment period ended before commencement); and
(b) regardless of whether a person is, or is not, an employee of the relevant employer at the time a claim to which that section relates is made.
(9) A reference to periods of employment as a casual employee in section 87, 96, 117, 119 or 121 of the amended Act applies to periods of employment starting before, on or after commencement.
(10) A reference to a regular casual employee in section 23, 65, 67 or 384 of the amended Act applies to periods of employment starting before, on or after commencement.
(11) To avoid doubt, nothing in subclause (1) is taken to change the time at which the person became an employee of the employer.
112 The primary judge (at [88]-[90]) reasoned that s 15A did not apply retrospectively to the proceeding before him. On this appeal, counsel for the respondents conceded that the provision does apply. In my view, that concession was rightly made.
113 As explained by Kitto J in Continental Liqueurs Proprietary Limited v G F Heublein and Bro Incorporated [1960] HCA 37; (1960) 103 CLR 422 (at 427), the general position at common law is that "when the law is altered during the pendency of an action the rights of the parties are decided according to the law as it existed when the action was begun, unless the new statute shows a clear intention to vary such rights". As more recently explained by Kiefel CJ, Bell, Keane, Nettle and Edelman JJ in Minogue v State of Victoria (2018) 264 CLR 252; [2018] HCA 27 (at [24]), the phrase "to avoid doubt" usually manifests Parliament's intent to retrospectively displace rights in a pending proceeding. Gageler J separately reasoned to the same effect at [93].
114 Although subclause (1) of clause 46 of schedule 1 focuses upon offers of employment "that were given before, on or after commencement", I do not construe the provision as limited to offers of employment and not to contracts entered into as the result of acceptance of an offer on or after the commencement date. Why that is so is evident from subclause (2), which is concerned with contracts that result from acceptance of an offer made before the commencement date, but only where subparagraphs (a) or (b) apply. This case does not meet either criteria. Moreover, in my opinion, subclause (4) operates to remove any further doubt that may linger in that it expressly disentitles an employee from his or her ability to make a claim for accrued entitlements pursuant to s 545A(4) of the FWA, which applies to certain types of entitlements under contracts that are described as casual employment.
115 Further, s 15A is the determinative provision for casual employment within the meaning of the FWA. As explained by the plurality in Rossato (HC) at [10]:
Before moving to a discussion of matters germane to the present appeal, it may be noted that the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Act 2021 (Cth), which came into effect after the filing of this appeal but before the appeal was heard, inserted a definition of "casual employee" into the Act. It also provided that an award of compensation for permanent employee entitlements payable to an employee mistakenly treated as a casual must be reduced by the amount of any identifiable casual loading paid to the employee. These amendments do not apply to employees like Mr Rossato in respect of whom a court has made a binding decision before commencement that the employee is not a casual employee. However, the amendments apply retrospectively to other employees, subject only to limited exceptions. The amendments had the stated intention of introducing a statutory definition of casual employment that "incorporates key aspects of the common law as expressed in … Skene and Rossato", as well as "a statutory offset mechanism so that employers will not have to pay twice for the same entitlements". Workpac did not seek to argue that the amendments provided any support for its arguments in relation to the proper construction of the term "casual employee" in the Act.
(citations omitted; emphasis added.)
116 The citation provided by the High Court for the quoted "stated intention" in [10] is the Second Reading speech. The Court in the same footnote also makes a 'see also' reference to the Explanatory Memorandum, which states relevantly, "Item 2 inserts new section 15A, which establishes the statutory definition. This would override the meaning of casual employee that has evolved over time at common law." Gageler J reasoned separately to the same effect at [109]-[111] and characterised the statutory definition as operating "comprehensively for the future".
117 For these reasons, I conclude that the primary judge erred in not applying s 15A of the FWA. Although the primary judge at least understood "on my reading of the authorities, a casual employee has no firm advance commitment from the employer to continuing and indefinite work according to an agreed pattern of work. Conversely, a casual employee does not give any such reciprocal commitment to the employer either": [91], he applied that reasoning to the large number of factors that he listed at [102] and which strayed well beyond the only matters that may be permissibly considered pursuant to s 15A. It follows that his ultimate conclusion that the appellant was engaged as a casual employee is infected by erroneous reasoning and I must now resolve that issue.
118 The parties did not frame their competing contentions at the trial by reference to s 15A, but did so in their submissions to this Court. That leads to difficulty. Section 15A requires that close attention be focused upon, first, the terms of the offer that is made by an employer; second, whether that offer is accepted; and third, whether the employer "makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work". In resolving the third issue, regard must only be had to the four considerations at s 15A(2). No attention was paid in the pleaded cases or in the evidence as to these matters. Indeed, just what offer was made, when, upon what terms and how it was accepted are details that remain opaque.
119 The appellant, in his amended statement of claim, did not grapple with the basal contract terms. Rather, he pleaded that, with effect from 4 January 2019, the first respondent through the actions and conduct of the second respondent "asserted" that the employment was casual and then made multiple claims asserting various failures by the employer to make payments in accordance with the entitlements of a casual employee pursuant to either of the awards relied upon. The first respondent, in its defence at paragraph 7.5, and without elaboration, pleaded that:
the Applicant entered into an oral agreement that he be employed as a casual employee which included among other terms that he be paid an hourly rate based on 38 hours per week inclusive of a casual loading and to cover off any entitlements that may otherwise be payable to him under the Short Haul Award …
120 The appellant, in his amended reply, simply responded to this contention as "untrue" at paragraph 7(i).
121 The appellant, in his affidavit made on 9 October 2019, set out the following relevant evidence at paragraphs [3]-[8]:
3. In about late April 2014 or early May 2014 I was looking for work and heard that the First Respondent ("Cooloola Milk") had a truck driving job available.
4. I called the main office of the First Respondent and got no answer. I knew that the Second Respondent ("Dick") was the owner of Cooloola Milk so I went to his house to see him. I asked Dick about the job. He told me he was after a driver for a prime mover and tanker. He gave me rundown on what I would be doing and the type of trucks I would be driving. I gave him my resume and we had a general chit chat about farming. Dick asked me to do a two week trial with the driver who was leaving. And I agreed.
5. I began working for Cooloola Milk on 2 May 2014.
6. During the initial trial period, I drove with Darryl, who was retiring. I was never told to fill in a timesheet and I noticed that Darryl didn't do one either. In all my time with Cooloola Milk I never once completed a timesheet or report my daily hours of work in order to get paid.
7. During the trial, Darryl showed me the driving runs and told me that:
a. we got paid fortnightly;
b. it was the same wage each week; and
c. that we were paid when we were sick and when we took holidays.
8. At the end of the fortnight trial, Dick told me that I had the job and that was that. Dick did not give me an employment contract.
122 In his affidavit made on 21 October 2019, the second respondent, at paragraphs [4]-[8], stated:
4. On 2 May 2014, Gregory started working for Cooloola Milk as a casual truck driver and told him he was employed on a casual basis.
5. At the commencement of Gregory's employment, I informed him that Cooloola Milk shuts down on Christmas Day and Good Friday every year. In my [sic] all my years running Cooloola Milk, Cooloola Milk has always shut down on Christmas Day and Good Friday.
6. I paid Gregory, a fixed amount each week based on 38 hours per week even if he worked less than 38 hours or was absent from work.
7. Gregory rarely worked more than 38 hours per week, and often worked less hours.
8. Since about October 2017, I observed that Gregory was not efficient in performing his duties and he was not performing to the standard that I expected from someone in his role.
123 In responding specifically to the affidavit of the appellant, the second respondent, at paragraph [14.8] and without qualification, agreed with paragraph 8 of the appellant's affidavit. Accordingly, it was not in dispute on the evidence that the appellant was first engaged (to use a neutral word) for a trial period of two weeks.
124 In cross-examination, the appellant gave the following evidence (T112:27-42):
MS WILLSON: Now, Mr Jess, I'm going to ask you about when you were first employed. You had a conversation with Richard Schroder - - -? ---Yes.
- - - about his need to have a - - -? ---Yes.
Somebody to drive some trucks? ---That's right, yes.
He said he wanted you to drive some milk tankers? ---Yes.
And some heavy rigid vehicles? ---Yes.
And he told you that you would be a casual worker? ---No, nothing was mentioned about that at all.
He told you that you would be getting the same pay as Darryl? ---No, nothing was discussed about pay at all or - - -
125 Counsel for the respondents did not take the issue any further. In the cross-examination of the second respondent, the following evidence was given (T72:17-32):
And when you spoke to Greg initially, before he started working for you and you offered him the job, you never said to him at any time, "Greg, there might be weeks when I don't have any work for you and you won't get paid". You never said anything like that to him? ---No.
You didn't say to him, "Greg, there might be weeks where there isn't as much work for you, and in those cases, you won't be getting paid as much". You never said anything like that? ---I did say there may be areas that will vary where you won't have as much work. I did not say, "You won't be getting paid". I made that quite clear when he came to work for me, because up at the house, I was still incapacitated, I had been in hospital, and he came up and I told him what the deal was, and he said, yeah, that will be fine, or words to that effect.
And you never said to him, "There are entitlements that you have under the award to be paid over time of penalty rates, but the rate of pay I'm sending you will offset those entitlements". You never said to - - -? ---I told him that's how we operate.
126 Counsel for the appellant did not specifically question the second respondent as to the terms of the offer of employment or when it was made. Put at its highest, there was evidence that the second respondent told the appellant, at some point, that he would be employed as a casual employee. However, as explained in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2022) 398 ALR 404; [2022] HCA 1 (Personnel Contracting), the label applied by the parties to describe their relationship is not determinative of its legal character: [63]-[67] per Kiefel CJ, Keane and Edelman JJ.
127 Counsel for the appellant submitted that, properly construed, there were two contracts: one for the trial and the other for permanent employment which followed successful completion of the trial. In my view, the evidence falls well short of establishing that proposition. Whether there was an agreement to pay the appellant for work undertaken during the trial period was not addressed by the primary judge. Nor was attention focused on whether the parties were subject to mutual obligations to provide work and to undertake it during the trial. In supplementary submissions from each party (at the request of the Court), it emerged as common ground that the appellant was paid at the rate of $21.57 per hour during the trial but counsel differed on the issue of mutuality of obligation. For the appellant, it was submitted that mutuality was lacking in that the purpose of the trial was to determine the appellant's suitability for work. In contrast, for the respondents, it was submitted that a contract with mutual obligations was entered into: the appellant was obliged to attend work and to perform work for which the first respondent accepted a payment obligation.
128 In my view, the very nature of the trial arrangement, as best as it can be understood on the paucity of evidence, is that each party was free to not continue with the trial for whatever reason, by offering work or performing it. It is the absence of this mutual obligation between the parties that points against the conclusion that a contract of service was entered into for the trial period: Dietrich v Dare (1980) 54 ALJR 388; Personnel Contracting (at [107]-[108] per Gageler and Gleeson JJ.
129 The primary question that ought to have been addressed at the trial is whether an offer of employment was made "on the basis that" the first respondent "makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work" and if that offer was made, whether it was accepted.
130 In the interrogation of that question, s 15A(2) operates to limit the scope of the inquiry to the factors at subparagraphs (a)-(d). Additionally, each of subparagraphs (3) and (4) operate to make it clear that, first, a "regular pattern of hours does not of itself indicate a firm advance commitment" of the statutory character; and second, determination of the question of whether a person is a casual employee "is to be assessed on the basis of the offer of employment and the acceptance of that offer, not on the basis of any subsequent conduct of either party". The parties did not conduct the case mindful of these requirements, even though the Amendment Act commenced during the period of a lengthy adjournment and before the evidence resumed on 10 May 2021. The parties were certainly aware of the provision and their submissions about it and its retrospective operation were put to the primary judge. However, no party made an application to amend the pleadings or to re-open the evidence.
131 During argument, the Court raised with counsel for each party whether, in the event that the Court concluded that the primary judge erred on the casual employment question, this aspect of the case should be the subject of an order for a new trial, so that each party would have a fair opportunity of presenting their respective cases in a way that addressed the requirements of s 15A. For the appellant, Mr Latham submitted that this course should not be taken in that there is no further evidence that the parties are able to give as to the terms of the contract. Ms Willson, for the respondents, accepted that it is open to make an order of that character, although it is not the preference of the respondents for the primary reason that this Court should make its own determination based on the evidence that was adduced at the trial.
132 Having regard to those submissions, I have concluded that I should not make an order for a new trial on the casual employment question, even though it is within the Full Court's power to do so pursuant to s 28(1) of the Federal Court of Australia Act 1976 (Cth).
133 Applying the criteria at s 15A(2)(a)-(d) of the FWA for the reasons below, I conclude that the evidence does not permit me to make a factual finding that the appellant was offered, and accepted, employment by the first respondent on the basis that it made no firm advance commitment to continuing and indefinite work according to an agreed pattern of work.