Decision in WorkPac v Rossato to be challenged in the High Court
On November 26, 2020, the High Court granted special leave to RCSA member WorkPac to appeal the decision of the Full Federal Court in WorkPac v Rossato, that allowed for some casual employees to claim permanent employee entitlements. This is a welcome development for not just the Australian staffing industry, but for all industries.
The decision in WorkPac v Rossato in May this year tested business confidence and caused enormous uncertainty for employers and employees alike, at a time when businesses were already grappling with the COVID-19 pandemic and subsequent lockdowns.
In finding for Rossato, the Full Federal Court ignored the fact that casual employees are paid a 25% loading in lieu of the entitlements afforded to permanent employees. This created a situation in which casual employees, both current and former, could double-dip on the loading and entitlements. It also forced businesses to carry a retrospective liability on their books, in which they had to prepare for double-dipping back pay claims for up to six years. The potential liability associated with this decision has been estimated to be between $18 and $39 billion.
For many businesses, the decision in WorkPac v Rossato has meant that they have put employment on hold. This, coupled with the COVID-19 recession, has only worked to extend the economic downturn we now face and stifled job creation. Now, more than ever, flexibility for business will be the deciding factor in whether and when they decide to invest after the economic shock of the pandemic. This will be the only way that business confidence is re-built, and the High Court is paving the way for this happen.
RCSA will continue to keep members updated as to the development of the case. The timing of the hearing before the High Court is uncertain, but expected to commence in mid-2021.