WorkPac Pty Ltd v Rossato

[2020] FCAFC 84

FEDERAL COURT OF AUSTRALIA

WorkPac Pty Ltd v Rossato [2020] FCAFC 84

File number:

QUD 724 of 2018

Judges:

BROMBERG, WHITE AND WHEELAHAN  JJ

Date of judgment:

20 May 2020

Catchwords:

INDUSTRIAL LAW – application by an employer for declarations that an employee could not claim the National Employment Standards entitlements to paid annual leave, personal/carer’s leave and compassionate leave because he was a casual employee within the meaning of ss 86, 95 and 106 of the Fair Work Act 2009 (Cth) (the FW Act), and could not claim the corresponding entitlements under the applicable enterprise agreement because he was a “Casual Field Team Member” (casual FTM) – consideration of the character of the employee’s employment – consideration of the expression “firm advance commitment” used in some authorities in relation to casual employment – employee not a casual employee for the purposes of the FW Act or a casual FTM under the enterprise agreement.

RESTITUTION – employer paid employee at a flat hourly rate in accordance with contracts of employment, which the employer claimed included an identifiable casual loading – employer claimed that if the Court found that the employee was not a casual employee for the purposes of the FW Act or a casual FTM under the enterprise agreement, it was entitled to restitution of the casual loading as the employee was unjustly enriched – employer sought restitution on the grounds of mistake and failure of consideration – restitution not available.

INDUSTRIAL LAW – employer claimed that if the Court found that the employee was not a casual employee for the purposes of the FW Act or a casual FTM under the enterprise agreement, it was entitled to bring into account amounts it paid to him as remuneration against the entitlements he claimed – whether the employer was entitled to have some portion of its payments of remuneration to the employee brought into account in discharge of its obligations to pay the entitlements he claimed – consideration of when an employer’s payments made under contract to an employee may operate to discharge its statutory obligations to the employee – employer’s payments of wages were not for the purpose of discharging statutory obligations to give the employee paid leave entitlements – consideration of reg 2.03A of the Fair Work Regulations 2009 (Cth) – employer not entitled to bring amounts into account.

Legislation:

Acts Interpretation Act 1901 (Cth), s 15AA

Evidence Act 1995 (Cth) s 91

Fair Work Act 2009 (Cth) ss 12, 20, 23, 40, 41, 44, 45, 50, 55, 56, 61, 62, 63, 65, 67, 86, 87, 88, 90, 92‑94, 95, 96, 97, 99‑101, 102, 104, 105, 106, 111, 114, 116, 117, 123, 139, 185, 284, 285,287, 294, 295, 323, 382, 384, 534, 535, 536, 570, 789

Federal Court of Australia Act 1976 (Cth) s 20(1A)

Industrial Relations Act 1988 (Cth) ss 170CA, 170CB, 170CC

Industrial Relations Amendment Act (No. 2) 1994 (Cth)

Industrial Relations Reform Act 1993 (Cth)

Legislation Act 2003 (Cth) ss 15J, 39

Workplace Relations Act 1996 (Cth) ss 170CC(1), 173, 185, 227, 235

Workplace Relations and Other Legislation Amendment Act 1996 (Cth)

Fair Work Amendment (Casual Loading Offset) Regulations 2018 (Cth)

Fair Work Regulations 2009 (Cth) regs 2.03A, 3.33, 3.46, 7.03

Industrial Relations Regulations (Cth) reg 30B

Workplace Relations Regulations 1996 (Cth) s 30B

Workplace Relations Regulations (Amendment), No 307 of Statutory Rules in 1996

Annual Holidays Act 1944 (NSW)

Industrial Arbitration Act 1940 (NSW) s 92

Public Sector Management Act 1992 (Vic)

Workers’ Compensation Act 1926‑1929 (NSW)

Cases cited:

ACE Insurance Ltd v Trifunovski [2013] FCAFC 3, (2013) 209 FCR 146

Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; (2008) 238 CLR 570

Agricultural Land Management Ltd v Jackson (No 2) [2014] WASC 102; (2014) 285 FLR 121

Airservices Australia v Ferrier (1996) 185 CLR 483

Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241

Australian and New Zealand Banking Group Limited v Finance Sector Union of Australia [2001] FCA 1785; (2001) 111 IR 227

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (the Laverton North and Cheltenham Premises Case) [2018] FCAFC 88; (2018) 262 FCR 473

Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd [2014] HCA 14; (2014) 253 CLR 560

Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385

Australian Securities and Investments Commission v Cassimatis (No 8) [2016] FCA 1023; (2016) 336 ALR 209

Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485

Autoclenz Ltd v Belcher [2011] 4 All ER 745

Baltic Shipping Company v Dillon [1993] HCA 4; (1993) 176 CLR 344

Barclays Bank Ltd v W.J. Simms Son & Cooke (Southern) Ltd [1980] QB 677

Bell v Lever Bros Ltd [1932] AC 161

Bernardino v Abbott [2004] NSWSC 430

BH Australia Constructions Pty Ltd v Kapeller (2019) 100 NSWLR 367

Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424

Byrne v Australian Airlines Limited (1995) 185 CLR 410

CAL No 14 Pty Ltd v Motor Accidents Insurance Board [2009] HCA 47; (2009) 239 CLR 390

Caltabiano v Electoral Commission of Queensland (No 1) [2010] 1 Qd R 100

Canavan Building Pty Ltd [2014] FWCFB 3202

Carmichael v National Power Plc [1999] 1 WLR 2042

Centennial Northern Mining Services Pty Ltd v Construction, Forestry, Mining and Energy Union [2015] FCAFC 100; (2015) 231 FCR 298

Certain Lloyd’s Underwriters v Cross [2012] HCA 56; (2012) 248 CLR 378

Cetin v Ripon Pty Ltd t/as Parkview Hotel [2003] AIRC 1195 (PR938639)

Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337

Community and Public Sector Union v State of Victoria [2000] FCA 759; (2000) 99 IR 217

Concut Pty Ltd v Worrell (2000) 176 ALR 693

Connelly v Wells (1994) 55 IR 73

Construction, Forestry, Mining and Energy Union v CSRP Pty Ltd [2017] FWCFB 2101

Construction, Forestry, Mining and Energy Union v Jeld‑Wen Glass Australia Pty Ltd [2012] FCA 45; (2012) 213 FCR 549

Cory Brothers & Company Limited v The Owners of the Turkish Steamship “Mecca” [1897] AC 286

County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193

Dacas v Brook Street Bureau (UK) Ltd [2004] EWCA Civ 217

David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353

Deutsche Morgan Grenfell Group plc v Inland Revenue Commissioners [2006] UKHL 49; [2007] 1 AC 558

Discount Lounge Centre v Wakefield [2007] SAIRC 15

Doyle v Sydney Steel Company Ltd (1936) 56 CLR 545

Ecob v Poletti (1989) 31 AILR 308

Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640

Equuscorp Pty Ltd v Haxton [2012] HCA 7; (2012) 246 CLR 498

Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365

Fair Work Ombudsman v Hu (No 2) [2018] FCA 1034; (2018) 279 IR 162

Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd (2015) 228 FCR 346

Fair Work Ombudsman v South Jin Pty Ltd [2015] FCA 1456

Fair Work Ombudsman v Transpetrol TM AS [2019] FCA 400

Farah Constructions Pty Ltd v Say‑Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89

Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32

Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603

Goldman Sachs JBWere Services Pty Ltd v Nikolich [2007] FCAFC 120; (2007) 163 FCR 62

Ha v New South Wales [1997] HCA 34; (1997) 189 CLR 465

Halgido Pty Ltd v DG Capital Company Ltd (1996) 34 ATR 582

Hamzy v Tricon International Restaurants [2001] FCA 1589; (2001) 115 FCR 78

Healy v The Law Book Company of Australasia Pty Ltd (1942) 66 CLR 252

Hollis v Vabu Pty Limited [2001] HCA 44; (2001) 207 CLR 21

Holt v Markham [1923] 1 KB 504

Homecare Direct Shopping Pty Ltd v Gray [2008] VSCA 111

Hookway v Racing Victoria Ltd [2005] VSCA 310; (2005) 13 VR 444

Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11

James Miller and Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC 583

James Turner Roofing Pty Ltd v Peters [2003] WASCA 28; (2003) 132 IR 122

Jones v Commerzbank AG [2003] EWCA Civ 1663

Josephson v Walker (1914) 18 CLR 691

Knysh v Corrales Pty Ltd [1989] FCA 318; (1989) 15 ACLR 629

Kraft Foods Group Brands LLC v Bega Cheese Ltd [2020] FCAFC 65

Ledger v Stay Upright Pty Ltd [2016] FCA 659

Legione v Hateley (1983) 152 CLR 406

Linkhill Pty Ltd v Director, Office of the Fair Work Building Industry Inspectorate [2015] FCAFC 99; (2015) 240 FCR 578

Logan v Otis Elevator Co Pty Ltd [1999] IRCA 4; (1999) 94 IR 218

Loves Bus and Taxi Service v Zucchiatti [2006] WAIRC 05758; (2006) 157 IR 348

Lumbers v W Cook Builders Pty Ltd (in liq) [2008] HCA 27; (2008) 232 CLR 635

Lym International Pty Ltd v Marcolongo [2011] NSWCA 303

Lynch v Buckley Sawmills Pty Ltd (1984) 3 FCR 503

MacMahon Mining Services Pty Ltd v Williams [2010] FCA 1321; (2010) 201 IR 123

Mann v Paterson Constructions Pty Ltd [2019] HCA 32; (2019) 373 ALR 1

Massey v Crown Life Insurance Co [1978] 2 All ER 576

Masterton Homes Pty Ltd v Palm Assets Pty Ltd [2009] NSWCA 234

McKeith v Royal Bank of Scotland Group PLC [2016] NSWCA 36; (2016) 216 IR 9

McRae v Commonwealth Disposals Commission [1951] HCA 79; (1951) 84 CLR 377

Melrose Farm Pty Ltd t/as Milesaway Tours v Milward [2008] WASCA 175; (2008) 175 IR 455

Metropolitan Health Service Board v Australian Nursing Federation [2000] FCA 784; (2000) 99 FCR 85

Mondelez v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union (AMWU) [2019] FCAFC 138

Moree Plains Shire Council v Goater [2016] FCAFC 135

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104

Narich Pty Ltd v Commissioner of Pay-Roll Tax [1983] 2 NSWLR 597

National Mutual Life Association of Australasia Ltd v Walsh (1987) 8 NSWLR 585

Nikolich v Goldman Sachs J B Were Services Pty Ltd [2006] FCA 784

North Adelaide Service Partnership v Retail Employees Superannuation Pty Ltd [2019] SASC 5

North Australian Aboriginal Legal Aid Service Inc v Bradley [2002] FCAFC 297; (2002) 122 FCR 204

Ogden Industries Pty. Ltd. v Lucas [1970] AC 113

OneSteel Manufacturing Pty Ltd v Blue Scope Steel (AIS) Pty Ltd [2013] NSWCA 27; (2013) 85 NSWLR 1

One.Tel Ltd (in liq) v Rich [2005] NSWSC 226; (2005) 53 ACSR 623

Oreb v Australian Securities and Investments Commission (No 2) [2017] FCAFC 49; (2017) 247 FCR 323

P’Auer AG v Polybuild Technologies International Pty Ltd [2015] VSCA 42

Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451

Pacific Publications Pty Ltd v Cantlon (1983) 4 IR 415

Palmer v Blue Circle Southern Cement Ltd [1999] NSWSC 697

Pan Ocean Shipping Co. Ltd v Creditcorp Ltd (The Trident Beauty) [1994] 1 WLR 161

Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221

Poletti v Ecob (No 2) (1989) 31 IR 321

Poulos v Waltons Stores (Interstate) Ltd [1986] FCA 159; (1986) 10 FCR 429

Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355

Protectacoat Firthglow Ltd v Szilagyi [2009] IRLR 365

Public Service Association of South Australia Inc v Industrial Relations Commission of SA [2011] SASCFC 14; (2011) 109 SASR 223

Public Service Association of South Australia Inc v Industrial Relations Commission of South Australia [2012] HCA 25; (2012) 249 CLR 39

Qube Ports Pty Ltd v Maritime Union of Australia [2018] FCAFC 72

Queensland Alumina Ltd v Alinta DQP Pty Ltd [2007] QCA 387

Queensland v Forest [2008] FCAFC 96; (2008) 168 FCR 532

Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567

Ray v Radano [1967] AR (NSW) 471

Re 4 Yearly Review of Modern Awards – Annual Leave [2015] FWCFB 3406; (2015) 250 IR 119

Re Metal, Engineering and Associated Industries Award, 1998 – Part 1 (2000) 110 IR 247

Re Queensland Electricity Commission; Ex parte Electrical Trades Union of Australia [1987] HCA 27; (1987) 72 ALR 1

Re Walsh; Ex parte Deputy Commissioner of Taxation [1982] FCA 88; (1982) 60 FLR 355

Reed v Blue Line Cruises Ltd (1996) 73 IR 420

Registrar of Titles (WA) v Franzon (1975) 132 CLR 61

Regulski v State of Victoria [2015] FCA 206

Request from the Minister for Employment and Workplace Relations – 28 March 2008 [2008] AIRCFB 1000; (2008) 177 IR 364

Richardson v Koefod [1969] 1 WLR 1812

Risk v Northern Territory of Australia [2006] FCA 404

Riverwood International Australia Pty Ltd v McCormick [2000] FCA 889; (2000) 177 ALR 193

Romero v Farstad Shipping (Indian Pacific) Pty Ltd [2014] FCAFC 177; (2014) 231 FCR 403

Romero v Farstad Shipping (Indian Pacific) Pty Ltd (No 3) [2017] FCAFC 102

Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516

Ryde‑Eastwood Leagues Club Limited v Taylor (1994) 56 IR 385

Saeed v Minister for Immigration and Citizenship [2010] HCA 23; (2010) 241 CLR 252

Scottish Equitable plc v Derby [2001] EWCA Civ 369; [2001] 3 All ER 812

Scott v Davis [2000] HCA 52; (2000) 204 CLR 333

Shop, Distributive & Allied Employees’ Association v Harris Scarfe Australia Pty Ltd [2014] FCA 283

Shugg v Commissioner for Road Transport and Tramways (NSW) (1937) 57 CLR 485

Skene v WorkPac Pty Ltd [2016] FCCA 3035

Skene v WorkPac Pty Ltd [2018] FCCA 3628

Skene v WorkPac Pty Ltd (No 2) [2017] FCCA 525

Soliman v University of Technology, Sydney (No 2) [2009] FCAFC 173; (2009) 191 IR 277

Stein v Torella Holdings Pty Ltd [2010] NSWSC 1445

Strang Patrick Stevedoring Pty Ltd v The Owners of the Motor Vessel “Sletter” (1992) 38 FCR 501

Svanosio v McNamara [1956] HCA 55; (1956) 96 CLR 186

Telum Civil (Qld) Pty Ltd v Construction, Forestry, Mining and Energy Union [2013] FWCFB 2434; (2013) 230 IR 30

Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd [2002] FCA 1406

Thompson v Big Bert Pty Ltd t/as Charles Hotel [2007] FCA 1978; (2007) 168 IR 309

Thorpe v South Australian National Football League (1974) 10 SASR 17

Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52; (2004) 219 CLR 165

TRA Global Pty Ltd v Kebakoska [2011] VSC 480; (2011) 209 IR 453

TransAdelaide v Leddy (No 2) (1998) 71 SASR 413

Transport Industries Insurance Co. Ltd. v Longmuir [1997] 1 VR 125

Trimis v Mina [1999] NSWCA 140

Visbord v Federal Commissioner of Taxation (1943) 68 CLR 354

Visscher v Giudice [2009] HCA 34; (2009) 239 CLR 361

Westpac Banking Corporation v Wittenberg [2016] FCAFC 33; (2016) 242 FCR 505

White v Timbercorp Finance Pty Ltd [2017] VSCA 361

Williams v Macmahon Mining Services Pty Ltd [2009] FMCA 511; (2009) 231 FLR 59

Williams v MacMahon Mining Services Pty Ltd (No 2) [2009] FMCA 763

Williams v MacMahon Mining Services Pty Ltd [2010] FCA 1321

WorkPac Pty Ltd v Rossato [2018] FCA 2100

WorkPac Pty Ltd v Skene [2018] FCAFC 131; (2018) 264 FCR 536

Birks, An Introduction to the Law of Restitution (Clarendon Press, Oxford, 1985)

Herzfeld and Prince, Interpretation (Thomson Reuters, Sydney, 2020)

Date of hearing:

7 and 8 May 2019

Date of last submissions:

8 May 2019

Registry:

Queensland

Division:

Fair Work Division

National Practice Area:

Employment & Industrial Relations

Category:

Catchwords

Number of paragraphs:

1025

Counsel for the Applicant:

Mr I Neil SC with Mr D Chin and Mr C Parkin

Solicitor for the Applicant:

Ashurst Australia

Counsel for the Respondent:

Mr C Murdoch QC with Mr J Dwyer

Solicitor for the Respondent:

Franklin, Athanasellis Cullen Laywers

Counsel for the First Intervener:

Mr C O’Grady QC with Ms B O’Brien

Solicitor for the First Intervener:

MinterEllison

Counsel for the Second Intervener:

Mr S Crawshaw SC with Mr R Reed

Solicitor for the Second Intervener:

Slater and Gordon Lawyers

Counsel for the Third Intervener:

Dr KP Hanscombe QC with Mr J Fetter

Solicitor for the Third Intervener:

Adero Law

Table of Corrections
25 May 2020	Was not “other than a casual employee” replaced with was “other than [a] casual employee” in para 10(i).

ORDERS

QUD 724 of 2018

BETWEEN:

WORKPAC PTY LTD (ACN 111 076 012)

Applicant

AND:

ROBERT ROSSATO

Respondent

MINISTER FOR JOBS AND INDUSTRIAL RELATIONS

First Intervener

CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION

Second Intervener

MATTHEW PETERSON

Third Intervener

JUDGES:	BROMBERG, WHITE AND WHEELAHAN  JJ
DATE OF ORDER:	20 May 2020

THE COURT ORDERS THAT:

1.The Applicant and Respondent confer by 26 May 2020 with a view to reaching agreement on the terms of the declarations and orders appropriate to give effect to the Court’s judgment and by 27 May 2020 file the minutes of the proposed declarations and orders on which they agree.

2.In the absence of agreement –

(a)by 27 May 2020 each of the Applicant and the Respondent file and serve the terms of the declarations and orders which it is proposed will give effect to the Court’s judgment together with a written submission in support, not exceeding three pages; and

(b)by 3 June 2020 the Applicant and the Respondent, if so advised, file and serve any submissions in reply, not exceeding three pages.

3.Any party or Intervener seeking an order for costs is by 27 May 2020 to file and serve a written submission, not exceeding three pages, setting out the order sought and any submissions in support.

4.Any party or Intervener opposing an order for costs is by 3 June 2020 to file and serve a written submission, not exceeding three pages, in opposition.

5.The Court will determine any outstanding issues concerning the terms of the declarations and orders and any application for costs on the papers.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BROMBERG J:

INTRODUCTION AND SUMMARY OF CONCLUSIONS	[1]
Summary of Conclusions	[9]
BACKGROUND FACTS	[18]
THE ENTITLEMENTS CLAIMED UNDER THE FW ACT	[27]
THE MEANING OF CASUAL EMPLOYEE	[31]
HOW IS THE EXISTENCE OR ABSENCE OF A FIRM ADVANCE COMMITMENT TO BE ASSESSED?	[37]
A Firm Advance Commitment	[61]
RELEVANT CONTRACTUAL PRINCIPLES	[76]
Text, Context and Purpose	[77]
Use of Post-Contractual Conduct	[80]
Conduct Subsequent to Initial Contract and Variation	[90]
Contractual Text that cannot Receive Effect According to its Terms	[94]
CONSTRUING THE CONTRACTS	[98]
The First Contract	[100]
First Contract – Post-Contractual Conduct	[141]
The Second Contract	[148]
Second Contract – Post-Contractual Conduct	[157]
The Third Contract	[168]
Third Contract – Post-Contractual Conduct	[172]
The Fourth Contract	[174]
Fourth Contract – Post-Contractual Conduct	[196]
The Fifth Contract	[198]
Fifth Contract – Post-Contractual Conduct	[199]
The Sixth Contract	[201]
Sixth Contract – Post-Contractual Conduct	[203]
Utilising Post-Contractual Conduct	[207]
Variation	[210]
CONSTRUING THE EMPLOYMENTS	[211]
ENTITLEMENTS CLAIMED UNDER THE ENTERPRISE AGREEMENT	[213]
PAYMENT AND DISCHARGE (THE “SET-OFF” CLAIM)	[216]
RESTITUTION	[264]

INTRODUCTION and summary of conclusions

1. This proceeding concerns an application by the applicant (“WorkPac”) for various declarations with respect to its employment of the respondent (“Mr Rossato”).

2. Mr Rossato was an employee of WorkPac over the period of 28 July 2014 until 9 April 2018. Over that period, six consecutive contracts of employment were made between Mr Rossato and WorkPac.  WorkPac treated each employment as a casual employment and Mr Rossato as a casual employee.

3. On 2 October 2018, Mr Rossato wrote to WorkPac claiming that, contrary to WorkPac’s treatment of him, he had not been a casual employee.  For that claim he relied on the Full Court judgment of WorkPac Pty Ltd v Skene (2018) 264 FCR 536. He claimed outstanding entitlements to paid annual leave, paid personal/carer’s leave and paid compassionate leave and public holiday pay entitlements due under the Fair Work Act 2009 (Cth) (“FW Act”) and an enterprise agreement made under that Act known as the WorkPac Pty Ltd Mining (Coal) Industry Enterprise Agreement 2012 (“Enterprise Agreement”). 

1. Mr Rossato claims that throughout the whole of the approximately three and a half years of his continuous employment by WorkPac, WorkPac did not pay him and he did not receive any paid annual leave, any paid personal/carer’s leave or any paid compassionate leave, or payment for any Christmas Days, Boxing Days or New Year’s Days which were not worked by him over the Christmas shut-down periods.  The claim for paid compassionate leave and paid personal/carer’s leave is not accurately identified in the evidence, but concerns a period of about four weeks immediately prior to Mr Rossato’s retirement, when his partner fell seriously ill.  The initial two days are claimed as paid compassionate leave and the remainder of the period as paid personal/carer’s leave.  Mr Rossato did not attend for work during that period and claims that he was not paid whilst taking that leave.    

2. Two days after Mr Rossato made his demands upon WorkPac, WorkPac commenced proceedings in this Court.  It seeks declarations, which in summary and broadly stated, would declare:

   (a)that by each of six contracts of employment, or alternatively by one or more contracts of employment – Mr Rossato was an employee of WorkPac under a written contract; was a casual employee at common law and within the meaning of ss 86, 95 and 106 of the FW Act; was a “Casual Field Team Member” (“Casual FTM”) and not a “Permanent Field Team Member” (“Permanent FTM”) within the meaning and for the purposes of the Enterprise Agreement and that Mr Rossato was therefore not entitled to paid annual, personal/carer’s, or compassionate leave under the FW Act or the Enterprise Agreement or payment for public holidays under the Enterprise Agreement;

   (b)alternatively, that Mr Rossato’s pay incorporated a casual loading of 25% of the minimum rate of pay payable under the Enterprise Agreement which was in part paid in lieu of Mr Rossato’s entitlements to annual leave, personal leave (including carer’s leave and compassionate leave) under the FW Act or the Enterprise Agreement and that WorkPac is entitled to “set-off” any amount owed to Mr Rossato with respect to those entitlements as well as the claimed entitlement to payment for public holidays;

   (c)alternatively, that by reason of a total failure of consideration, or alternatively, mistake, WorkPac is entitled to restitution of that part of the remuneration paid to Mr Rossato being:

   (i)the difference between the amount payable to a Flat Rate “Permanent FTM” and a flat rate “Casual FTM” under the Enterprise Agreement; or, in the alternative

   (ii)the Casual Loading incorporated into the rate of pay of a Flat Rate “Casual FTM” under the Enterprise Agreement.

3. The proceeding was allocated to be heard and determined by a Full Court. Further detail as to how the proceeding came to be litigated and heard by the Full Court and the unusual features of the litigation are set out in the reasons of White J at [276].

4. Leave was granted to intervene to the Minister for Jobs and Industrial Relations (“Minister”), the Construction, Forestry, Maritime, Mining and Energy Union (“CFMMEU”) and Mr Petersen (the applicant in a separate class action brought against WorkPac in which claims for annual leave entitlements by employees said to have been wrongly treated as casual employees are also made).  Broadly speaking, the CFMMEU and Mr Petersen made submissions supportive of Mr Rossato’s case.  The Minister’s submissions dealt only with “set‑off” and restitution and were supportive of WorkPac’s case.

5. The facts in this proceeding are largely uncontested and were set out in a Statement of Agreed Facts and an addendum to that Statement (“agreed facts”).

   Summary of Conclusions

6. I have had the very significant benefit of reading in draft, the separate reasons of each of White and Wheelahan JJ.  I respectfully agree with the dispositive conclusion reached by their Honours on each of the matters in issue.  In relation to many of the issues I need to address, I have provided my own reasons.  Where indicated, I have gratefully adopted the reasoning of White J or Wheelahan J.

7. For the reasons that follow I have concluded that:

   (i)In each of his employments with WorkPac, Mr Rossato was “other than a casual employee” within the meaning of ss 86, 95 and 106 of the FW Act and not excluded from the entitlements to paid annual leave, paid personal/carer’s leave and paid compassionate leave provided in Divs 6 and 7 of Pt 2-2 of the FW Act and payments for public holidays in accordance with s 116 of the FW Act; and

   (ii)In each of his employments with WorkPac, Mr Rossato was a “Permanent FTM” and not a “Casual FTM” for the purposes of the Enterprise Agreement and was entitled to paid annual leave, paid personal/carer’s leave and paid compassionate leave and payment for public holidays in accordance with that Agreement.

8. WorkPac has not made payments to Mr Rossato in discharge of his outstanding entitlements to paid annual leave, paid personal/carer’s leave, paid compassionate leave or for public holidays and is not entitled to the “set-off” it claims.

9. WorkPac is not entitled to restitution of the monies it claims, either on the basis of a failure of consideration or on the basis of mistake.

10. Having reached those conclusions, subject to providing the parties with an opportunity to address the final form of the declarations that should be made and on the basis that WorkPac and Mr Rossato have informed the Court that they will agree the quantum of the following entitlements, I would make the following declarations:

    (a)In the period between 28 July 2014 and 9 April 2018, Mr Rossato was employed by WorkPac under six consecutive contracts of employment constituted by his acceptance of offers of employment dated 17 July 2014, 29 May 2015, 19 February 2016, 27 September 2016, 11 November 2016 and 21 December 2016 respectively;

    (b)In his employment under each of the contracts, Mr Rossato was other than a casual employee for the purposes of ss 86, 95 and 106 of the FW Act and was a “Permanent FTM” and not a “Casual FTM” for the purposes of the Enterprise Agreement;

    (c)Mr Rossato is entitled, pursuant to s 90(2) of the FW Act, to payment in respect of his accrued entitlement to paid annual leave;

    (d)Mr Rossato is entitled, pursuant to ss 99 and 106 of the FW Act and pursuant to cll 19.7‑19.9 and 19.12 of the Enterprise Agreement, to payment in respect of his absences from work for which he should have been paid personal/carer’s leave and compassionate leave; and

    (e)Mr Rossato is entitled, pursuant to s 116 of the FW Act and cl 20 of the Enterprise Agreement, to payment in respect of those public holidays on which, but for the Christmas shutdowns, he would have been rostered to work.

11. I would dismiss WorkPac’s claims for declarations and, subject to considering any application for costs, otherwise dismiss WorkPac’s originating application.

12. These reasons are structured as follows. I will identify by way of background the relevant parties, outline in general terms the relation between them, the contracts they made, and broadly, the context in which Mr Rossato worked under those contracts. I will then set out the sources of the entitlements said by Mr Rossato to be outstanding under the FW Act. As Mr Rossato’s claim to each of those entitlements depends upon whether he was “other than [a] casual employee” it will be necessary to turn to the meaning of “casual employee” under the relevant provisions of the FW Act. Given that it is accepted that the presence of a “firm advance commitment” (a concept I shall shortly explain) would result in the conclusion that Mr Rossato was “other than a casual employee”, I will next address how the existence or absence of a “firm advance commitment” is to be assessed. A major issue in contest, although in the end not determinative, is whether that assessment must be conducted purely by reference to the contract or alternatively through the process of characterising the nature of the employment and, if by reference to the contract, whether or not post-contractual conduct may be taken into account.

13. Turning first to a purely contractual analysis, I will set out the relevant and applicable contractual principles before I turn to construe each of Mr Rossato’s contracts to determine whether or not it included a “firm advance commitment”.  I will turn then to consider whether, if the assessment is to be conducted on the wider basis of a characterisation of Mr Rossato’s employment, a “firm advance commitment” existed or not. 

14. Next I shall consider the entitlements claimed by Mr Rossato under the Enterprise Agreement.  As those claims depend on Mr Rossato not being a “Casual FTM” under the Enterprise Agreement, I will determine whether he was an employee of that category or instead a “Permanent FTM”.  Lastly, I will turn to WorkPac’s case that if Mr Rossato was “other than a casual employee” or was a “Permanent FTM” he is nevertheless not entitled to the entitlements he claims.  As earlier indicated, WorkPac relies on a claimed “set-off” and also claims restitutionary relief.  

    BACKGROUND FACTS

15. Mr Rossato was a qualified and experienced production employee in the open cut black coal mining industry.  WorkPac is a labour hire company.  WorkPac engages workers and provides their services to its clients who require labour.  WorkPac specialises in the provision of labour in particular industries including in the black coal mining industry. 

16. Mr Rossato first engaged with WorkPac by completing its online web registration form on 21 December 2013, following this, on 23 December 2013 Mr Rossato went to WorkPac’s office in Mackay where he communicated his interest to work for WorkPac at the Collinsville Mine site.  At that meeting Mr Rossato signed a copy of a document headed “Casual or Maximum Term Employee Terms & Conditions of Employment - Employee Declaration” (“Employee Declaration”).  By signing the Employee Declaration, Mr Rossato declared that he had read and understood a document titled “Casual or Maximum Term Employee - Terms and Conditions of Employment” (“General Conditions”).  

17. Mr Rossato commenced employment with WorkPac on 28 July 2014.  Although it is not entirely clear, the better view is that the three and a half years of Mr Rossato’s continuous employment with WorkPac was performed pursuant to six “assignments” or employments under six separate contracts of employment.  It is accepted that the written terms of each of those contracts are contained in two documents.  The first, the General Conditions, an umbrella document applicable to each of the six contracts, and the second, a Notice of Offer (“NOCE”) which was applicable to each particular contract (“First to Sixth NOCE”). 

18. Under the First Contract, Mr Rossato was employed to work at the Collinsville Mine between 28 July 2014 and 29 May 2015.  He then moved to the Newlands Mine and under the Second Contract worked at that mine between 1 June 2015 and 19 February 2016.  The Third Contract involved little more than a change in Mr Rossato’s rate of pay and under that contract Mr Rossato continued to work at the Newlands Mine between 19 February 2016 and 27 September 2016.  Mr Rossato then moved back to the Collinsville Mine and under the Fourth Contract was employed from 27 September 2016 to 10 November 2016.  The fifth and sixth contracts were also concerned with work at the Collinsville Mine and in each case were motivated by a change in Mr Rossato’s pay rate.  The Fifth Contract covered the period 14 November 2016 to 21 December 2016.  The Sixth Contract covered the period 21 December 2016 until Mr Rossato’s retirement on 9 April 2018. 

19. The Collinsville Mine and the Newlands Mine to which I have referred were each operated by Glencore Australia Pty Ltd and its related entities (“Glencore”).  At all relevant times and at each of those mines, Glencore had a workforce structure for its production workforce which included both its own employees and an appreciable component of production employees sourced through a labour hire company like WorkPac.  The production employees employed by Glencore were “permanent” or on-going indefinite employees of Glencore. 

20. Throughout his employments with WorkPac, Mr Rossato worked as part of the production workforce at either the Collinsville Mine or the Newlands Mine.  Like many other employees of WorkPac, his service was provided by WorkPac to Glencore to meet Glencore’s requirement for production workers at those coal mines.  

21. In each employment Mr Rossato performed work as directed by Glencore.  He was allocated work in accordance with Glencore’s work allocation system.  For the entirety of each employment Mr Rossato was allocated to a crew under the then applicable shift roster issued by Glencore.  Each crew consisted of a combination of Glencore employees and WorkPac employees like Mr Rossato.  All employees performed the same production operator duties under the supervision of a Glencore employee.   

22. During his employments with WorkPac Mr Rossato did not take any day or part‑day off due to personal illness or injury (whether paid or unpaid).  He worked every shift that he was rostered to work save for where the mine was shut down over Christmas, occasions where his crew was not required to work due to inclement weather or cyclones, an occasion where he was given approval to take rest and recreation when the start-up roster at the Collinsville Mine changed to a roster of seven days on/seven days off (“7/7 roster”) and on one occasion shortly before he retired when he urgently left work to support his partner who had been airlifted to hospital. 

23. Other facts common to each of the employments are provided by the legal background and in particular the terms of the Enterprise Agreement.  Those terms need not be set out here.  They are set out in the reasons of White J and I will refer to those I consider to be of relevance later.

    the entitlements claimed under the FW Act

24. It is pertinent to provide a brief account of each of the relevant provisions of the FW Act pursuant to which Mr Rossato claims an entitlement.

25. Division 6 of Pt 2-2 of the FW Act (“Div 6”) provides for entitlements to paid annual leave. Section 86 identifies those employees who are entitled to paid annual leave by stating that the Division applies to employees “other than casual employees”. Section 90(2) provides that if an employee has a period of untaken paid annual leave when the employment ends, the “employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave.”

26. Division 7 of Pt 2-2 of the FW Act provides, relevantly, for the entitlement to paid personal/carer’s leave and paid compassionate leave. Section 95 provides that the entitlement to paid personal/carer’s leave applies to employees “other than casual employees”, and s 106 makes the same provision with respect to paid compassionate leave.

27. Section 116 of the FW Act in Div 10 of Pt 2-2 provides that if an employee is absent from employment on a day or part-day that is a public holiday, the employer must pay the employee for the ordinary hours of work on that day or part-day.

    The Meaning of Casual Employee

28. The meaning of casual employee as used in the expression “other than casual employees” in s 86 of the FW Act (dealing with entitlements to annual leave), s 95 of the FW Act (dealing with entitlements to personal/carer’s leave) and s 106 of the FW Act (dealing with compassionate leave) was not in contest. It was accepted that in Skene, a Full Court of this Court (Tracey, Bromberg and Rangiah JJ) correctly determined that a casual employee is an employee who has no firm advance commitment from her or his employer to continuing and indefinite work according to an agreed pattern of work (“firm advance commitment”).   

29. The Full Court in Skene heard and determined an appeal from a judgment of the Federal Circuit Court of Australia. WorkPac had employed Mr Skene as a dump-truck operator from 17 April 2010 to 17 July 2010 and then again from 20 July 2010 to 17 April 2014 at coal mining operations in central Queensland. In the proceedings before the Federal Circuit Court, Mr Skene claimed that he was a permanent full-time employee of WorkPac and that he was entitled to paid annual leave and consequential entitlements to untaken paid annual leave upon his employment having come to an end. Relevantly, he claimed that his entitlement to paid annual leave derived from Div 6 and in particular ss 87 and 90. He also claimed paid annual leave and related entitlements under the enterprise agreement which covered WorkPac in relation to his employment. Before the Full Court, WorkPac appealed the judgment of the Federal Circuit Court that Mr Skene was entitled under Div 6 to be paid monies on termination for untaken annual leave.

30. WorkPac asserted that the Federal Circuit Court had erred in failing to find that Mr Skene was a “casual employee” for the purposes of s 86 of the FW Act and that he was therefore excluded from any entitlement to paid annual leave under Div 6. WorkPac contested the holding of the primary judge that, the expression “casual employee” in s 86 of the FW Act was intended to have its general law meaning (that is, the usual meaning or connotation given to the phrase by the authorities), and contended that the expression had a non-legal technical meaning uniformly used in a specialised sense in federal awards and industrial agreements. The specialised meaning contended for by WorkPac in Skene was that “casual employee” under s 86 of the FW Act meant an employee designated as such by the industrial instrument which covered the employee (see at [70]).

31. The Full Court in Skene rejected WorkPac’s appeal for a range of reasons. Relevantly, the Full Court was not persuaded that the phrase “casual employee” in s 86 of the FW Act was intended to be used in the specialised non-legal sense for which WorkPac contended. The Full Court held that “casual employee” was an expression that had acquired a general law meaning and that the legislature had used that phrase in s 86 with that intended meaning as adjusted by any indications to be drawn from the FW Act itself (see at [154] and [155]).

32. The Full Court extensively considered the authorities which had given expression to the meaning of the phrase “casual employee”. It observed at [170] that the expression “casual employee” describes a type of employment that, at least in part, takes its meaning from other recognised types of employment. It was noted (at [170]) that extensive reference is made in the FW Act to two other types of employment – full-time and part-time employment. As the Full Court observed (at [171]) both on-going full-time and part‑time employments are, subject to rights of termination of the employment, characterised by a commitment given by the employer to provide the employee with continuous and indefinite employment according to an agreed pattern of ordinary hours of work, with a corresponding commitment given by the employee to continue to provide work according to the agreed pattern. As the Full Court said (at [172]), in contrast with on-going full-time or part-time employees, a casual employee “has no firm advance commitment from the employer to continuing and indefinite work according to an agreed pattern of work” and nor does a casual employee provide a reciprocal commitment to the employer. That characteristic (the firm advance commitment), which the Full Court regarded as typifying casual employment and distinguishing it from on‑going or indefinite full‑time or part-time employment, was regarded as consistent with what the Full Court in Hamzy v Tricon International Restaurants(2001) 115 FCR 78 had described as the “essence of casualness”. The Full Court in Skene (at [173]) further observed that 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”.

1. As those observations from Skene demonstrate, the Full Court spoke of an absence of a firm advance commitment as capturing the “essence” of casualness and as that which “typifies casual employment”.  The submissions of the parties tended to treat the absence of a firm advance commitment as the defining characteristic of all casual employments whereas, in my view, the Full Court in Skene was not addressing all employments but rather the most common form – employment for the time-based (as opposed to task-based) performance of work.  However, nothing turns on that observation.  Mr Rossato’s contracts of employment with WorkPac were all of that common form.

   How is the existence or absence of a firm advance commitment to be assessed?

2. At the level of principle, and although the meaning of “casual employee” was not in contest, how the existence or absence of a firm advance commitment is to be assessed was at the heart of the contest between WorkPac and Mr Rossato.   

3. WorkPac contended that in a contract wholly in writing the existence of a firm advance commitment can only be demonstrated by an express term providing such a commitment.  The corollary being that an absence of such an express term demonstrates an absence of a firm advance commitment and thus that the contract is for casual employment.  On WorkPac’s contention, in relation to a contract wholly in writing, the question of whether or not a firm advance commitment exists “must be answered solely by reference to the written terms to the exclusion of all else”.  That, so WorkPac contended, requires an exclusive focus upon the contract at the time it was formed and means that the post-contractual conduct of the parties is not relevant to the assessment.  The parol evidence rule was said to impose that limitation.

4. WorkPac’s primary case was that the assessment raised a question of contractual construction limited to the express terms of the contracts made by WorkPac and Mr Rossato.  As each of its contracts with Mr Rossato were wholly in writing and did not contain an express term giving a firm advance commitment, Mr Rossato was a casual employee. 

5. On the other hand, Mr Rossato contended that his contracts with WorkPac were not wholly in writing and that, in any event, if they were, a firm advance commitment is given by each of those contracts.  Mr Rossato also contended that whether a firm advance commitment was given was to be assessed by a process of “characterisation” through which (citing the observation made in Skene at [180]) “[t]he 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”.

6. WorkPac challenged the appropriateness of utilising a process of characterisation and argued that the Full Court in Skene was wrong to say that such a process was applicable. 

7. At one level these contentions raised a conceptual divide.  WorkPac essentially contended that whether Mr Rossato was a casual employee is a question of contract to be answered solely by reference to the express terms of the contract.  On the other hand, Mr Rossato contended that whether or not he was a casual employee is a question of fact answered by the characterisation of all of the features or facts of his employment which serve to identify its type or specie. 

8. Whether the requisite assessment raises merely a question of contract or the characterisation of all of the facts of the employment is an issue that does not strictly need to be here resolved.  That is because Mr Rossato contended that if the requisite assessment is confined to his contracts, he was not a casual employee under each of those contracts.  For the reasons later given, I accept that contention to be correct.  However in case I am wrong, the alternative case should be considered, including because it is helpful for the purpose of addressing the assessment as purely a question of contract.  It is convenient to say something more about that now but leave my ultimate conclusion on the alternative case for consideration after I have dealt with WorkPac’s primary case. 

9. Mr Rossato’s contention that the assessment requires a characterisation based on all of the facts of his employment stems from what was said by the Full Court in Skene.  In Skene, the Full Court accepted that the term “casual employee” has no precise meaning but that it nevertheless has a general law meaning derived in the same way as the term “employee” has derived its general law meaning.  At [159], the Full Court said this:

   It may be accepted that the term ‘casual employee’ has no precise meaning and that whether any particular employee is a casual employee depends upon an objective characterisation of the nature of the particular employment as a matter of fact and law having regard to all of the circumstances. That the expression lacks precise definition and that the shade of its colour is dependent upon context does not deny that the term has acquired a legal meaning, especially where the general law has laid down indicia by which the factual circumstances are to be assessed in the process of characterisation. In that regard the expression ‘casual employee’ is no different to the term ‘employee’. Both have acquired a legal meaning referrable to the particular indicia found by the authorities to be relevant to the characterisation process. For the term ‘employee’ the relevant indicia are applied through what is commonly described as a ‘totality test’: Hollis v VabuPty Ltd (2001) 207 CLR 21 (Vabu) at [24] (Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ). White J in South Jin recognised that the expression ‘casual employee’ had a ‘meaning in the general law’ at [65]. As did Barker J in MacMahon at [34].

10. At [180] the Full Court also said:

    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) 228 FCR 346 at [142] (North and Bromberg JJ) citing R v Foster; Ex parte Commonwealth Life (Amalgamated) Assurances Ltd (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) 153 IR 228; 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 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 (ACE Insurance) 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 Community and 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.   

11. Not all of the indicia of an employment relationship will be found in the instrument which created and governs that relationship.  That is because an employment is dynamic and involves a high degree of interaction between the parties to that relationship.  Accordingly, the indicia of an employment relationship are often found in the course of dealing between the parties to that relationship.  In the process of defining the nature of a relationship by reference to its indicia, the course of dealing or the conduct of the parties, and not just the written terms of the contract, are likely to be relevant. 

12. In Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at [24] (Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ) said this:

    It should be added that the relationship between the parties, for the purposes of this litigation, is to be found not merely from these contractual terms.  The system which was operated thereunder and the work practices imposed by Vabu go to establishing ‘the totality of the relationship’ between the parties; it is this which is to be considered.

13. The Full Court in Skene (at [159]) relied upon those and like observations in Hollis (as well as other authorities) in stating that a characterisation of the overall relationship was the settled approach to determining whether a person is an employee.  Reliance upon Hollis was also made by Buchanan J (with Lander and Robertson JJ in agreement) in ACE Insurance Ltd v Trifunovski (2013) 209 FCR 146 at [107] where, addressing post-contractual conduct, Buchanan J said that “it now seems established in Australian law that all the circumstances should be taken into account”.

14. WorkPac submitted that the observation made in Hollis was not directed to the characterisation of a relationship created by a contract wholly in writing – in relation to which post-contractual conduct may not be utilised.  By treating the observation in Hollis as applicable to all contracts, including wholly written contracts, WorkPac contended that the Full Courts in ACE and Skene were plainly wrong by failing to distinguish the position for wholly written contracts. 

15. That the position in relation to wholly written contracts is distinguishable, was said by WorkPac to be a consequence of the application of the parol evidence rule.  I discuss that rule in more detail below.  As that discussion states, the parol evidence rule imposes a limitation on the use of evidence of post-contractual conduct for the purpose of construing the meaning of terms in a contract wholly in writing.  Where, however, the Court is determining whether the parties to a contract have characterised the nature of their legal relationship correctly, the exercise will not ordinarily involve giving meaning to a term of the contract which labels the legal relationship.  Rather, the essential question that arises will be whether the label or designation can “receive effect according to its terms”: Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 at 389 and see [95] below. That exercise entails a search for the true mutual intent of the parties. Other than in the case of a sham, the exercise is premised upon a presumption that the parties intended to correctly characterise their legal relationship and that, where they failed to do so, they must have intended that the incorrect characterisation would be of no effect. The answer to the question as to whether the parties have correctly characterised their legal relationship may be given by an assessment of the contract read as a whole (as was the case in Chaplin) but is not confined to that consideration alone, because the purpose of the exercise does not enliven the parol evidence rule.  So much may be seen from the judgment of the Supreme Court of the United Kingdom in Autoclenz Ltd v Belcher [2011] 4 All ER 745 (discussed further below) where the designation made in the written contract of the legal relationship between the parties as that of principal and independent contractor was not given effect, including because it was inconsistent with the conduct of the parties: see at [38]. Similarly, in Protectacoat Firthglow Ltd v Szilagyi [2009] IRLR 365, where the issue was whether a partnership relationship had been created by the written contract: see at [57].  In Homecare Direct Shopping Pty Ltd v Gray [2008] VSCA 111, the Victorian Court of Appeal considered whether the designation of principal and agent given in a written contract could be given effect. As Forrest AJA (with Neave and Kellam JJA in agreement), observed, it was permissible to examine the conduct of the parties in determining whether, in truth, their legal relationship was that of principal and agent: see at [49]-[50] and at [58].

16. There is a high threshold to establish that two recent Full Court judgments are plainly wrong.  That threshold has not here been met.  I do not consider either Skene or ACE to be in error in the manner suggested by WorkPac.  It is not necessary to further detail why that is so because even if WorkPac is correct – that the use of post-contractual conduct in the process of characterising whether a relationship is that of employment is limited to contracts not wholly in writing – it does not follow that the same limitation applies to the characterisation of a type or specie of employment. 

17. The characterisation of an employment by its type, recognises that although an employment was created and is governed by the contract, an employment is not just the contract.  An employment is the product of the contract.  It includes the course of dealing which has taken place under the contract.  If the object of the characterisation process is to determine which kind or specie of employment (or employee) has been produced by the contract then resort must be made to the course of dealing in order to characterise the employment by type.  As its architect, the contract will have much to say about the type of employment that has been constructed but, if what is being characterised is the thing that has been constructed itself, then an inspection of that construction, so that its features are noted, is both a relevant and appropriate exercise.  The parol evidence rule’s limitation upon the use of post-contractual conduct is inapplicable because it is not only the written contract which is being construed or characterised.  

18. A process which seeks to categorise an object or a thing into one of its different types or species is best undertaken by reference to all of the features which typify that thing, rather than merely those features that are apparent from its founding instrument or were apparent at its foundation.

19. What is here being called upon to be characterised by the term “casual employee”, is the type of employment Mr Rossato worked in at the time the impugned entitlements accrued, rather than simply what type of contract he made at the outset of that employment.The specific language used by ss 86, 95 and 106 of the FW Act is instructive. It describes the excluded employees as “casual employees”. That directs attention to the character of the employment rather than to the character of the engagement. That language may be contrasted with provisions directed at the character of that which was created upon engagement: see for instance s 170CC(1) of the former Workplace Relations Act 1996 (Cth) which identified the targeted class as “employees engaged on a casual basis for a short period”.

20. In not too dissimilar circumstances to those here relevant, in TransAdelaide v Leddy (No 2) (1998) 71 SASR 413, an issue arose as to whether the status of an employee under an enterprise agreement was “part-time” or “full-time”. Despite the relevant clause speaking to the terms of the engagement and providing that “[a] part time employee is one engaged and paid as such and is employed on a basis to work an agreed minimum number of rostered hours of less than 38 hours per week”, Doyle CJ stated (at 417) that in order for the clause to perform its function it “must refer to the terms of engagement as they stand from time to time”. His Honour went on to say that it would be “artificial to exclude from consideration events that occur after the initial engagement and during the term of employment”.

21. It is also helpful in this respect to recall the observations made by McTiernan J in Doyle v Sydney Steel Co Ltd (1936) 56 CLR 545 at 565 where his Honour considered the analogous term “casual worker” and stated, in terms directed to the facts of the employment, that whether a person is a “casual worker” is a question of fact and that “[e]ach case is to be determined on its own facts, consideration being given not only to ‘the nature of the work but also the way in which the wages are paid, or the amount of the wages, the period of time over which the employment extends, indeed all the facts and circumstances of the case’”.

22. The provisions providing for annual leave, personal/carer’s leave and compassionate leave, are listed as two of the ten “National Employment Standards” that Parliament has specifically chosen as “minimum standards that apply to the employment of employees which cannot be displaced” (s 61 of the FW Act). As was stated in Skene at [87], in the hierarchy of terms and conditions of employment, the National Employment Standards are at the pinnacle. They have primacy over and cannot be displaced by enterprise agreements, modern awards or a contract of employment. These are entitlements that Parliament has identified to be especially important and it cannot be doubted that Parliament intended that the entitlements provided for be effective, in the sense that they be provided to those employees considered to be in need of access to paid leave as a minimum standard. At [93] and [125] of Skene, and by reference to the limitations imposed by ss 92 to 94 of the FW Act on the “cashing out” of accrued annual leave, the Full Court explained Parliament’s intent that those employees entitled to paid annual leave take at least four weeks of actual leave per year so that they be provided with rest and recreation. Similar restrictions on “cashing out” paid personal/carer’s leave are contained in ss 100 and 101 of the FW Act, indicating again that Parliament regarded it as important that those employees to whom the entitlements were conferred actually utilise paid leave when sick or when required to care for a family or household member. At [168], the Full Court in Skene identified the legislative rationale for choosing to confer the entitlement to annual leave on all employees “other than casual employees”.  The rationale is that, as employees who are not obliged to provide on‑going service, casual employees do not ordinarily have the same need for access to rest and recreation as employees in continuing regular employment.  A similar rationale is evident in relation to the exclusion made to each of the personal/carer’s leave and compassionate leave entitlements.

23. The purpose and the policy behind the inclusion of these important entitlements into the FW Act should be given effect to: s 15AA Acts Interpretation Act 1901 (Cth). The purpose would not be best effectuated if the exclusion which ss 86, 95 and 106 carves out for casual employees was artificially enlarged so that intended beneficiaries of these entitlements, or some of them, were excluded. That suggests that in the assessment to be made as to whether or not a person is an intended beneficiary of the statutory entitlements to paid leave, form will give way to substance and the fact and reality of the employee’s need to access leave should be given force. That is best achieved by an assessment based on the facts as they stand at the time when the relevant entitlement or its accrual was operational rather than merely as a matter of the written contract made at the outset of the employment. The entitlements to paid annual leave and paid personal/carer’s leave do not accrue on the formation of a contract of employment. They are tied to service and accrue in relation to each year of service: ss 87(1), 87(2) and 96 of the FW Act. It should not be thought that Parliament ceded control over access to these important entitlements by allowing – what has been truly created and truly subsists – to be usurped by expressions of intent in the written contract which may never have or which may no longer reflect the existing facts and reality of the employment. If that was permitted, the displacement which s 61(1) of the FW Act prohibits could be achieved by the written contract.

1. WorkPac contended, by reference to both the FW Act and its predecessor legislation, that there was a clear legislative intent that casual employment should be assessed without reference to post-contractual conduct. That exercise is unproductive, as the reasons of White J demonstrate. Nor is WorkPac’s reliance on the language used in Hamzy to describe the firm advance commitment persuasive.

2. Having said all that about the conceptual divide, I do not intend to suggest that it necessarily follows that there will be much of a practical divide between the two approaches to assessment here discussed.  That will be so at least where, as WorkPac acknowledged, any variation to the contract made after its commencement must be given full force and effect.  I will later refer to the relevant contractual principles, but it is worth here noting that orthodox contractual principles, including those that recognise the fluid variation of a contract, facilitate the contract catching up with and reflecting the facts of an employment as varied from time to time.  Other principles permit substance to trump over form in the search for the reality of what has been created or agreed, even where a contract is wholly in writing.

   A Firm Advance Commitment

3. For the purposes of the assessment about to be undertaken, it is necessary to make some further observations about the nature of a firm advance commitment and the indicia which suggest either its absence or presence in a contract of employment.  If the assessment is to be conducted as a question of contract it must follow that a firm advance commitment must be promissory and thus a contractual term.

4. It is not necessary to discuss the postulated firm advance commitment beyond the present context of a contract which is (for reasons I will explain) of on-going or indefinite duration providing for time-based rather than task-based service.  The utility of a presence or absence of a firm advance commitment as an organising principle for distinguishing between casual and non‑casual employment is not in contest and in my view rightly so.  Its utility in relation to task-based contracts of employment and short-term temporary employment is, I think, more contestable but need not here be further explored. 

5. The following discussion is also premised on an acceptance that a casual employee may be engaged on a continuing basis: Ryde-Eastwood Leagues Club Ltd v Taylor (1994) 56 IR 385 at 401-402 (Bauer and Hungerford JJ, Murphy CC); Melrose FarmPty Ltdv Milward [2008] WASCA 175 at [110] (Le Miere J with Steytler P in agreement). It follows that, of itself, continuity of service is not a defining characteristic of non-casual employment.

6. In order for time-based work to be performed it must be allocated in advance of its performance, in the sense that the time period or periods for performance need to be identified in advance.  In a continuing employment, work will be both allocated and performed in a series of periods or blocks of time.  In some employments the periods of working time will be regular, in the sense that the periods of time will be repeating even if not entirely uniform – for instance, 9am to 5pm Monday to Friday or seven dayshifts of 12 hours each followed by seven nightshifts of 12 hours each (recognisable as a full-time pattern of work) or three hours every Tuesday and Thursday morning (recognisable as a part-time pattern of work).  Alternatively, the periods of working time may be irregular and intermittent involving no fixed pattern of work.

7. There is a fundamental difference between regular employment and irregular employment.  In terms of periods of working time, regular employment consists of predictable periods of working time and provides substantial certainty that the work will be both available to be performed and will be performed during the designated periods.  Irregular work provides neither predictability nor certainty. 

8. The certainty provided by regular employment is not absolute but is usually substantial and of value.  There will be no absolute certainty because the employment itself will be subject to rights of termination and the pre‑programmed working time will be subject to occasional adjustments brought about by unpredictable events such as an employee’s need for sick leave or an employer’s need for overtime to be worked or to stand down an employee because of a breakdown in machinery.  However, whilst not absolute, substantial certainty ordinarily has value.  In regular employment, and from an employer’s point of view, there will be substantial certainty that the work will be performed by the employee allocated to perform it at the allocated time.  That has obvious commercial value.  Most operations reliant on labour could not function efficiently without that certainty.  From the employee’s point of view, substantial certainty of the availability of future work provides substantial certainty of future earnings as well as avoiding the opportunity cost usually borne by the casual employee of standing and waiting for work to be made available.  These motivations are apt to be understood as going to an important purpose or object of a contract for regular employment. 

9. There is a natural reciprocity of benefits brought about by the making of a contract for regular employment sufficient to demonstrate an exchange of promises.  In an on‑going employment, and from an employer’s point of view, the promise given is a firm advance commitment from the employee to continuing and indefinite availability for the performance of work according to an agreed pattern of work.  From an employee’s point of view, it is a firm advance commitment to continuing and indefinite work according to an agreed pattern of work.  Each of those commitments is subject to rights of termination and the agreed pattern of work is subject to the need to make occasional adjustments for unpredictable events of the kind earlier referred to. 

10. These commitments may be seen as stand-alone promises, but where given, they are ancillary to the fundamental promises exchanged in any contract of employment – the employer’s promise to utilise and pay for the service of the employee and the employee’s promise to perform work in the service of the employer.  Where these promises are not given, their absence in an on-going time-based contract of employment will ordinarily demonstrate a contract for casual employment.

11. Where given, a firm advance commitment may be express or implied.  I reject WorkPac’s contention that where the contract is wholly written, a firm advance commitment must be express.  A wholly written contract consists of both express and implied terms: Narich Pty Ltd v Commissioner of Pay-Roll Tax [1983] 2 NSWLR 597 at 601 (Lord Brandon of Oakbrook on behalf of the Privy Council).

12. Where implied or inferred, the intention of the parties as to whether to provide a firm advance commitment will likely be revealed by a consideration of the agreement as a whole but with a particular focus upon the indicia the authorities have recognised over many decades as indicative of casual or non-casual employment. 

13. A firm advance commitment is likely to be absent where what the Full Court described in Skene as “the usual manifestations of an absence of a firm advance commitment” are apparent, namely, irregular work patterns, uncertainty, discontinuity, intermittency of work and unpredictability: see at [173]. Reliance upon indicia of that kind is found in Doyle at 555 (Dixon J), Shugg v Commissioner for Road Transport and Tramways (NSW) (1937) 57 CLR 485 at 496 (Dixon J), Reed v Blue Line Cruises Ltd (1996) 73 IR 420 at 425-426 (Moore J); Williams v MacMahon Mining Services Pty Ltd [2010] FCA 1321 at [33]-[34] (Barker J); Cetin v Ripon Pty Ltd [2003] AIRC 1195 at [59] (Ross VP, Duncan SDP, Roberts C); Bernardino v Abbott [2004] NSWSC 430 at [23] (Gzell J); Thompson v Big Bert Pty Ltd [2007] FCA 1978 at [57] (Buchanan J).

14. Another indicator of an absence of a firm advance commitment is the existence of an employee who stands and waits, or in other words, is only given the opportunity to provide her or his service in response to a specific demand that a specific period of working time be worked: see Reed at 425 (Moore J); Hamzy at [38] (Wilcox, Marshall and Katz JJ), MacMahon at [33]-[35] (Barker J), Fair Work Ombudsman v Hu (No 2) [2018] FCA 1034 at [224] (Rangiah J), Melrose Farm at [104] (Le Miere J with Steytler P in agreement) and Fair Work Ombudsman v South Jin Pty Ltd [2015] FCA 1456 at [69] (White J).

15. By reason of the reciprocal nature of the firm advance commitment, an employee’s capacity to choose whether or not to work a period of working time demanded or requested by the employer, suggests an absence of the firm advance commitment: see Reed at 425 (Moore J), Melrose Farm at [104] (Le Miere J with Steytler P in agreement); Shop, Distributive and Allied Employees’ Association v Harris Scarfe Australia Pty Ltd [2014] FCA 283 at [26] where Buchanan J said this:

    there is a significant difference between a roster for full-time or part-time employees, which involves an allocation of work which they have agreed to undertake, and an offer of casual engagements, which a casual employee is usually free to accept or decline.  

16. A provision permitting a short period of notice of termination of the contract has been regarded as a relevant consideration indicating an absence of a firm advance commitment: Skene at [191]. Short notice periods may indicate that the employment was intended to be irregular. A principal function of a notice period is to provide some opportunity to the employer or the employee affected by the termination of the contract to take measures to redress the loss of the contract. The shorter the period provided for, the shorter is the period likely to have been considered reasonably necessary to redress that loss. Redressing the loss of regular employment (from an employee’s perspective) or the loss of an employee performing regular work (from an employer’s perspective) may ordinarily be regarded as requiring a longer period of notice of termination as compared to irregular employment. For that reason, a short notice period may point to a contract for irregular work in which the firm advance commitment is absent.

17. Other indicia will likely be relevant.  Some are later referred to when Mr Rossato’s contracts are considered.

    relevant contractual principles

18. For the purposes of the assessment of Mr Rossato’s contracts about to be undertaken it is also necessary to address the relevant contractual principles which are to be applied in that assessment.

    Text, Context and Purpose

19. As Mason J explained in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 352, “evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning.” The evidence of surrounding circumstances, ie. the factual matrix, is restricted to evidence of the “objective framework of facts within which the contract came into existence, and to the parties’ presumed intention”, not to the parties’ actual intentions, aspirations or expectations.

20. The principles for the construction of commercial contracts are well established, as French CJ, Nettle and Gordon JJ stated in Mount Bruce Mining Pty Ltd v Wright ProspectingPty Ltd (2015) 256 CLR 104 at [46]‑[51]:

    [46]The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose.

    [47]In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That inquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract.

    [48]Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning.

    [49]However, sometimes, recourse to events, circumstances and things external to the contract is necessary. It may be necessary in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding ‘of the genesis of the transaction, the background, the context [and] the market in which the parties are operating’. It may be necessary in determining the proper construction where there is a constructional choice.

    …

    [50]Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties’ statements and actions reflecting their actual intentions and expectations.

    [51]Other principles are relevant in the construction of commercial contracts. Unless a contrary intention is indicated in the contract, a court is entitled to approach the task of giving a commercial contract an interpretation on the assumption ‘that the parties … intended to produce a commercial result’. Put another way, a commercial contract should be construed so as to avoid it ‘making commercial nonsense or working commercial inconvenience’.

21. See further Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ); Kraft Foods Group Brands LLC v Bega Cheese Ltd [2020] FCAFC 65 at [176] (Foster, Moshinsky and O’Bryan JJ).

    Use of Post-Contractual Conduct

22. The summary of WorkPac’s case and that of Mr Rossato set out above suggests that the scope and application of the parol evidence rule and in particular the extent to which it precludes resort to post-contractual conduct to be of central importance.  That, however is not so because, in my view, Mr Rossato makes out his case without any need to resort to post-contractual conduct.  However, should that view be erroneous and there remains a need to consider post‑contractual conduct, it is necessary to refer to authority which explains when post‑contractual conduct may be utilised to discern the mutual intention of contracting parties.  As will be apparent, the applicable principles are driven by the purpose for which post‑contractual conduct is sought to be used. 

23. Relying on Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570 at [35], WorkPac contended that “the parol evidence rule precludes any recourse to the post‑contractual conduct of the parties”. That contention overstates the general principle discussed in Gardiner. What Gummow, Hayne and Kiefel JJ said at [35] (citing Lord Reid in James Miller and Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC 583 at 603) (emphasis added) was that “it is not legitimate to use as an aid in the construction of [a] contract anything which the parties said or did after it was made”.  As Campbell JA (with Allsop P and Giles JA in agreement) said at [327] of Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603, Gardiner establishes that “the use of subsequent conduct is forbidden to prove any matter that cannot legitimately enter into the construction of a written contract in accordance with the objective theory of contract.  In particular, it cannot be used to prove what the parties meant by particular terms that they used in their contract”.

24. The rule in Gardiner is applicable to a contract wholly in writing.  However, as Campbell JA (with Basten JA and Sackar J in agreement) said in Lym International Pty Ltd v Marcolongo [2011] NSWCA 303 (at [141]-[143]), there is a vast difference between interpreting a wholly written contract and one not wholly in writing. For a contract wholly in writing, the task of interpretation is “ascertaining the meaning that the bystander who knows all the relevant surrounding circumstances would understand from the parties using the words in that writing”. Post-contractual conduct cannot assist the task of interpretation, save in the case of “post‑contractual events providing retrospectant evidence of a surrounding circumstance that was known to the parties at the time of contracting”. By contrast, where the contract is not wholly in writing the task is finding as a fact what the parties have agreed, and “a range of post‑contractual conduct could be relevant to ascertaining what the parties have agreed”: see also BH Australia Constructions Pty Ltd v Kapeller (2019) 100 NSWLR 367 at [69] (Leeming JA).

25. In Lym International (see at [136]-[140]) Campbell JA agreed with the analysis of Spigelman CJ in County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 who there relied upon Lord Hoffman’s reasoning in Carmichael v National Power Plc [1999] 1 WLR 2042. In County, Spigelman CJ held that the contract there in question was partly in writing, partly oral and partly to be inferred from conduct. His Honour reasoned (at [2]) that reliance on conduct was necessary because important aspects of the agreement were not the subject of express statements, either written or oral, in a form which could constitute the making of an agreement. At [7], Spigelman CJ observed (emphasis added):

    In the present case, the subject matter and the concomitant terms of the contract must be inferred from a combination of surrounding circumstances including conversations, documents and conduct none of which provide a definitive form of words. The issue is not one of interpretation, because there are no words to interpret. The issue is one of fact: what did the parties agree?

26. Referring to the parol evidence rule, at [20] Spigelman CJ concluded:

    Where what is in issue is the identification of the subject matter of the contract, or the identification of necessary terms which were not the subject of express provision in a contract not reduced to writing, then consideration of post contractual conduct does not contravene the reasons underlying the [parol evidence] principle.

27. In Qube Ports Pty Ltd v Maritime Union of Australia [2018] FCAFC 72, White J (with Mortimer and Bromwich JJ in agreement) at [85] applied the reasoning in County stating, “[t]here are circumstances in which the subsequent conduct of parties to a contract may be considered for the purpose of identifying the terms of their contract (as distinct from the meaning of those terms)”.

28. That the subsequent conduct of the parties to a contract may be used to identify the terms of the contract was also accepted by Campbell JA (with Allsop P and Basten JA in agreement) in Masterton Homes Pty Ltd v Palm Assets Pty Ltd [2009] NSWCA 234 at [90]. In a detailed survey of the authorities, Campbell JA (at [90]) also set out principles that are applicable in deciding whether an agreement is wholly in writing or partly written and partly oral (authorities omitted):

    (1)When there is a document that on its face appears to be a complete contract, that provides an evidentiary basis for inferring that the document contains the whole of the express contractual terms that bind the parties.

    (2)It is open to a party to prove that, even though there is a document that on its face appears to be a complete contract, the parties have agreed orally on terms additional to those contained in the writing. Conversely, it is open to a party to prove that the parties have orally agreed that a document should contain the whole of the terms agreed between them.

    (3)The parol evidence rule applies only to contracts that are wholly in writing, and thus has no scope to operate until it has first been ascertained that the contract is wholly in writing.

    (4)Where a contract is partly written and partly oral, the terms of the contract are to be ascertained from the whole of the circumstances as a matter of fact.

    (5)In determining what are the terms of a contract that is partly written and partly oral, surrounding circumstances may be used as an aid to finding what the terms of the contract are. If it is possible to make a finding about what were the words the parties said to each other, the meaning of those words is ascertained in the light of the surrounding circumstances. If it is not possible to make a finding about the particular words that were used (as sometimes happens when a contract is partly written, partly oral and partly inferred from conduct) the surrounding circumstances can be looked at to find what in substance the parties agreed.

1. Poletti v Ecob, and its adoption of the analysis of Sheldon J in Ray v Radano, was applied by the Full Court of the Industrial Relations Court of Australia (Wilcox CJ, Marshall and Madgwick JJ) in Logan v Otis Elevator Co Pty Ltd [1999] IRCA 4; 94 IR 218 (Logan). In Logan, the applicant was employed as the respondent’s local representative in Orange, New South Wales, and he was entitled under the applicable award to payments in respect of overtime and call-backs. The Court held that the employer was not entitled to offset against the entitlements salary that it paid to the applicant that was in excess of his award entitlements. That was because neither party sought to designate or appropriate the excess, or any part of it, to any particular obligation owed by Otis to Mr Logan. Rather, the difference between the award entitlement and the salary that the respondent paid was held to be appropriate to reflect the difference between the position of a local representative, and an ordinary “electrician special class”, which was Mr Logan’s award classification. For that reason, none of the excess could reasonably be identified as a payment on account of overtime and call-backs.

2. The Full Court of this Court considered the issue again in Australia and New Zealand Banking Group Ltd v Finance Sector Union of Australia [2001] FCA 1785; 111 IR 227 (ANZ v FSU). The question before the Court was whether payments made by an employer to some retrenched employees under the employer’s Retirement/Severance Allowance Scheme operated to discharge its obligation to make payments on account of untaken long service leave under the applicable award. At [47], the Court (Black CJ, Wilcox and von Doussa JJ) held that the passage in Poletti v Ecob which I have set out at [39] above accurately analysed the judgment of Sheldon J in Ray v Radano, and enunciated the relevant principle. In relation to the reference in Poletti v Ecob to a contractually agreed purpose of a payment, the Court stated at [48] –

   The first situation noted in the passage is one where “the parties to a contract of employment have agreed that a sum or sums of money will be paid and received for specific purposes, over and above or extraneous to award requirements”. In that situation, the Full Court said, “the contract between the parties prevents the employer afterwards claiming that payments made pursuant to the contractual obligation can be relied on in satisfaction of award entitlements arising outside the agreed purpose of the payments.” (Emphasis added.) So the critical question is whether the relevant award entitlements arose outside the contractually agreed purpose.

3. The Court held at [50]-[52] that both the award entitlement and the contractual entitlement under the Scheme were money entitlements in respect of untaken long service leave, and that the award entitlement and contractual payment arose out of the same agreed purpose. The Court held that it was not necessary that the same label attach to the payments, but what was required was a close correlation between the nature of the contractual obligation, and the nature of the award obligation, which the Court held to exist. In relation to the second situation discussed in Poletti v Ecob, namely the designation of the purpose of payments by the employer, the Court stated at [54] –

   The question that arises in respect of the second situation is whether the Retirement/Severance Allowance payment “is designated by the employer as being for a purpose other than the satisfaction of the award entitlements”. … It is evident that it was intended that any payment of Retirement/Severance Allowance would subsume any lesser obligation to make payment under the award in respect of untaken long service leave.

4. Counsel for the Finance Sector Union relied on the notices of payment issued by the employer bank, which divided the total payment between “long service leave” and “Retiring Allowance Eligible Termination Payment”, and submitted that the notices had irrevocably designated the payments in question. In addressing this submission, the Court held that the division was explicable on account of the different taxation treatment of the amounts, and that the true character of the payments was to be determined by the Scheme, a feature of which was to subsume the award obligation. Accordingly, because the character of the payments under the Scheme was in respect of untaken long service leave, the payments were to be taken into account in determining whether the employees had received the money due to them under the award on account of untaken long service leave.

5. White J has considered at [850] to [852] and [877] to [880] the decision of the Western Australian Industrial Appeal Court in James Turner Roofing. I respectfully agree with his Honour’s summary and analysis of that decision, to which there is nothing that I can add.

6. As I have mentioned, many of the authorities were reviewed by North and Bromberg JJ in Linkhill. In that case, the employer had sought to characterise the parties’ relationship as one of principal and independent contractors, but at trial the primary judge held that the relationships were of employer and employees. The employer sought to raise on appeal for the first time new arguments concerning whether payments made to the employees during the course of their employment could be taken into account in calculating outstanding award entitlements. The Court (North and Bromberg JJ at [93], and White J at [134]) refused leave to raise the new arguments. Although it was unnecessary to do so, North and Bromberg JJ addressed briefly the merits of the arguments that the employer had sought to raise. There is nothing in their Honour’s observations by way of obiter dicta that directly challenges the correctness of the principles in Poletti v Ecob or ANZ v FSU. However, their Honours stated at [99]-[100] –

   99… Neither Linkhill or the Director contended that the principles articulated in Poletti v Ecob and ANZ v FSU and the other authorities discussed in these reasons were inapplicable because they were developed in circumstances where the parties succeeded in creating the employment relationship which, subjectively, they intended to make. Given that the purpose or intent of the parties in relation to a particular payment is central to the application of those principles, it may be that the principles do not translate well to a situation where the parties have created a relationship different to that which, subjectively, they had set out to make. Those principles may not apply to the circumstances in which the parties did not intend to provide for award entitlements at all because they did not advert to or had disavowed the relevance of such entitlements.

   100However, both the proper interpretation of James Turner Roofing, and the question whether the principles established in Poletti v Ecob and ANZ v FSU and the other authorities discussed in these reasons apply in the case of a failed attempt to create a contract for services may be left for another day.

7. In Fair Work Ombudsman v Transpetrol TM AS [2019] FCA 400 (Transpetrol), the applicant applied unsuccessfully for the imposition of civil penalties on the employer of the crew of an oil and chemical tanker flagged in Panama which was sailing in Australian regulated waters under temporary licences issued on the application of sub-charterers of the vessel pursuant to s 37 of the Coastal Trading (Revitalising Australian Shipping) Act 2012 (Cth). Pursuant to reg 1.15E(1)(c) of the Fair Work Regulations 2009 (Cth), and s 33(3) of the Fair Work Act, the Act extended to ships in Australian regulated waters that were the subject of a temporary licence. The crew on the vessel were the subject of collective agreements negotiated with the International Transport Workers’ Federation (ITF). Those collective agreements included specific agreements according to the nationality of the seafarer, and an ITF standard collective agreement covering vessels flying a flag of convenience. The ITF agreement applied different collective bargaining agreements to different seafarers depending on their nationality or the relevant national law. Under these agreements, seafarers and officers of different nationalities performing the same work would be entitled to different rates of pay. There were also individual seafarer employment agreements. However, under separate arrangements, the employer applied a gross pay wage scale across the crew so that there was an equivalence of pay for seafarers and officers of the same rank performing the same work. The rates of pay in the pay scale were higher than those required under the applicable collective bargaining and employment agreements. The employer issued each crew member with a statement that broke down the gross wage into various components specified in the applicable collective bargaining agreements. The breakdown in the statements had to reflect the obligations under the various collective agreements so as not to put the vessel’s “blue certificate” at risk. The top up to reach the employer’s own wage scale was specified as an “owners allowance”.

8. It was uncontentious that, in respect of ten voyages, the amounts that the employer paid to the crew were not sufficient to discharge its obligations under the Australian Seagoing Industry Award 2010 and the National Minimum Wage Order 2014. One of the issues that Rares J considered in Transpetrol was whether and to what extent payments made by the employer to the crew in the way described above could be offset against monies due under the Award and the Order, and could thereby be taken into account in the employer’s favour for the purposes of considering the question of penalty. Rares J cited Poletti v Ecob, ANZ v FSU, James Turner Roofing, and Linkhill and stated –

   113.It follows that there is no inflexible principle that precludes a creditor, who has appeared to designate or appropriate a payment to discharge a specific liability, from relying on all of the circumstances to demonstrate that the true character of the payment is, in fact, different or, alternatively, to justify the use of that payment as a set off to a different liability. …

   …

   116.[T]he character of Transpetrol’s total payment to the crew member was that it wished to pay a common lump sum, in addition to the requirements of the differing relevant national laws applicable to any particular crew member, according to the wage scale that would be more than sufficient to meet all contractual and statutory liabilities (even if overlapping) that it had to the crew member. Accordingly, the gross total payment that Transpetrol made (before the Ombudsman’s investigation) to each crew member is the relevant one for the purposes of assessing its liabilities under the Fair Work Act while Turmoil sailed on each of the ten voyages in Australian regulated waters.

   117.For those reasons, I am of opinion that Transpetrol is entitled to set off fully the total wages it paid earlier to the official crew members to reduce the sum of its liabilities in respect of each of the ordinary time, overtime or NMWO contraventions. That enables Transpetrol to achieve a partial discharge of its additional liabilities to pay the crew members under the Fair Work Act during the part or parts of the ten voyages when Turmoil sailed in Australian regulated waters.

9. Rares J identified the relevant intention of the employer as payment of a gross total payment that would be more than sufficient to meet all its contractual and statutory liabilities arising under different jurisdictions. A payment of that character was able to be appropriated to discharge liabilities under the Fair Work Act.

   WorkPac’s submissions

10. WorkPac submitted that the authorities established two propositions. First, if payments are made pursuant to a particular contractual obligation, then the payments may not be relied upon to discharge an entitlement under an award that arises outside the agreed contractual purpose. Second, as an application of the common law rules relating to appropriation, an employer may pay a sum of money to an employee, and designate it as satisfying a relevant award entitlement. WorkPac’s principal submission, however, was that neither of these principles was applicable to the present case because, “those principles were developed in circumstances where the parties succeeded in creating the type of relationship which, subjectively, they intended to make”. WorkPac submitted that a third principle for which it contended applied, namely that the purpose or intent of the parties was irrelevant, and that the entire amount paid to Mr Rossato that exceeded the rate applicable to a permanent FTM, regardless of its agreed purpose or designation, was available to “set off” the entitlements payable to Mr Rossato as a permanent employee. By its submissions, WorkPac claimed that by application of the third principle, the whole of the difference between the hourly rates that were actually paid to Mr Rossato, and the applicable hourly rates payable to a permanent FTM under the Enterprise Agreement, were available to discharge the entitlements that Mr Rossato claimed.

11. In the alternative to its principal submission, WorkPac submitted in reliance on the first two propositions to which I have referred at [53] above that portions of the casual loading that it claimed was incorporated into Mr Rossato’s rate of pay were attributable to annual leave and personal leave, and could be applied to discharge its liability to pay Mr Rossato the entitlements that he claimed on account of leave. WorkPac claimed that of the 25% casual loading –

    (1)11% was attributable to annual leave; and

    (2)5% was attributable to personal leave.

12. In addition, WorkPac relied on reg 2.03A of the Fair Work Regulations, to which White J has referred.

    Analysis of WorkPac’s claim to offset the remuneration paid to Mr Rossato

13. There is no difficulty in finding that the payments of remuneration made by WorkPac to Mr Rossato were appropriated by WorkPac to the indebtedness that arose upon the performance of work by Mr Rossato pursuant to the contracts of employment. That inference arises from the combination of the express terms of the NOCEs, and WorkPac’s payment advices to Mr Rossato for the weeks from 28 July 2014 to 7 April 2018 that were in evidence. The payment advices recorded the hours that Mr Rossato worked, and multiplied those hours by the applicable flat hourly rates of pay. The summaries in the payment advices attributed sums to “wages”, “gross taxable wages”, and “net wages”, and consistently with the agreed fact that Mr Rossato did not take leave, no payment advice attributed any sum to the entry “leave taken”. However, the forms of expression used in the payment advices are not determinative of the next question that arises, which is whether the discharge of the indebtedness arising under the contracts of employment also operated to satisfy the statutory obligations to pay the entitlements that Mr Rossato claims. That question involves an inquiry that must look to the objective purpose of the payments under the terms of the contracts of employment set against the circumstances known to both parties, and the surrounding statutory framework, which amounts to determining what a reasonable person would have understood by the terms: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ).

14. If the payments under the contracts were directed to the same purpose as, or at least had a close correlation to, an obligation under the Fair Work Act to make a payment, then they may be taken into account in satisfying the statutory obligations: ANZ v FSU at [50]-[54]. I do not accept WorkPac’s submission that there is a third principle which circumvents these principles and under which purpose is irrelevant. Such a principle is not supported by the Full Court decisions in Polletti v Ecob, ANZ v FSU, and Linkhill, or the decisions of other appellate courts in Logan, TransAdelaide, and James Turner Roofing. Those decisions have not been shown by WorkPac to be wrong, still less plainly wrong.

15. I shall now address in more detail the statutory entitlements that are the subject of Mr Rossato’s claims.

    Annual leave

16. The entitlement of an employee other than a casual employee to take paid annual leave arises under s 87 of the Fair Work Act, which provides (inter alia, and omitting notes) –

    87       Entitlement to annual leave

    Amount of leave

    (1)For each year of service with his or her employer, an employee is entitled to:

    (a)4 weeks of paid annual leave; or

    (b)5 weeks of paid annual leave, if:

    (i)a modern award applies to the employee and defines or describes the employee as a shiftworker for the purposes of the National Employment Standards; or

    (ii)an enterprise agreement applies to the employee and defines or describes the employee as a shiftworker for the purposes of the National Employment Standards; or

    (iii)the employee qualifies for the shiftworker annual leave entitlement under subsection (3) (this relates to award/agreement free employees).

    Accrual of leave

    (2)An employee’s entitlement to paid annual leave accrues progressively during a year of service according to the employee’s ordinary hours of work, and accumulates from year to year.

    …

17. The term “paid annual leave” is defined by s 12 of the Fair Work Act as “paid annual leave to which a national system employee is entitled under section 87”. Clauses 19.1 to 19.6 of the Enterprise Agreement contained terms that supplemented the statutory entitlements: see Fair Work Act, s 55(4)(b). Under the Agreement, an employee was entitled to five weeks of annual leave for each year of employment, with some shift workers entitled to six weeks. In relation to flat rate FTMs, annual leave was payable at the flat rate of pay prescribed by the schedules to the Agreement.

18. As the text of s 87 of the Fair Work Act indicates, the primary entitlement is an entitlement to take paid annual leave. The entitlement is an element of the minimum terms and conditions in the National Employment Standards. Ancillary provisions of the Act serve to reinforce the nature of the entitlement as a composite entitlement to take leave while being paid, with the evident purpose of encouraging the taking of recreational leave: see, WorkPac Pty Ltd v Skene [2018] FCAFC 131; 264 FCR 536 at [125] (Tracey, Bromberg and Rangiah JJ). When leave is taken, the employer must pay the employee at the applicable base rate of pay for ordinary hours worked: s 90(1). Section 90(1) of the Act is to be construed with s 323(1) which, subject to some exceptions, provides that an employer must pay an employee amounts payable in relation to the performance of work in full and at least monthly. The notes under s 323(1) provide that the amounts referred to in the subsection include leave payments if they become payable during a relevant period. The notes to s 323(1) are at least an aid to interpretation. In addition, I am of the view that the notes to s 323(1) form part of the Act and are therefore not subject to the exclusion of marginal notes, footnotes, and endnotes effected by s 13(3) of the Acts Interpretation Act 1901 (Cth) as in force on 25 June 2009: see: Fair Work Act, s 40A. The notes to s 323(1) were referred to in the explanatory memorandum to the Fair Work Bill 2008 at [1283], which supports the view that they form part of the text of the Act, and are explanatory of s 323(1). See: One.Tel Ltd (in liq) v Rich [2005] NSWSC 226; 53 ACSR 623 at [45]-[54] (Bergin J); Centennial Northern Mining Services Pty Ltd v Construction, Forestry, Mining and Energy Union [2015] FCAFC 100; 231 FCR 298 at [30] (Tracey, Flick and Katzmann JJ); Oreb v Australian Securities and Investments Commission (No 2) [2017] FCAFC 49; 247 FCR 323 at [46] (Rares, Davies and Gleeson JJ); and see also, Herzfeld and Prince, Interpretation (Thomson Reuters, Sydney, 2020) at [5.130]. leave may be taken for a period agreed between the employer and employee, and the employer must not unreasonably refuse to agree to a request by an employee to take annual leave: s 88. There is a general prohibition on cashing out annual leave, subject to the provisions of an award or enterprise agreement, or an agreement between an employer and an award/agreement free employee: s 92. Permissible terms allow the cashing out of leave only in respect of the excess beyond an accrued entitlement of four weeks: s 93(2)(a) and s 94(2).

1. The entitlement to payment on account of untaken annual leave which Mr Rossato claims arises under s 90(2) of the Act, which is contingent upon two conditions: (1) the accrual of a period of untaken annual leave; and (2) the end of the employment –

   90       Payment for annual leave

   …

   (2)If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave.

2. Mr Rossato claimed an entitlement to payment on account of 22.3 weeks of accrued annual leave pursuant to s 90(2) on the ground that this entitlement to payment arose upon his employment by WorkPac ending.

   Personal/carer’s leave

3. Mr Rossato’s claim for payment for personal leave arises under s 96 and s 97 of the Fair Work Act, which provide (inter alia) –

   96       Entitlement to paid personal/carer’s leave

   Amount of leave

   (1)For each year of service with his or her employer, an employee is entitled to 10 days of paid personal/carer’s leave.

   Accrual of leave

   (2)An employee’s entitlement to paid personal/carer’s leave accrues progressively during a year of service according to the employee’s ordinary hours of work, and accumulates from year to year.

   97       Taking paid personal/carer’s leave

   An employee may take paid personal/carer’s leave if the leave is taken:

   …

   (b)to provide care or support to a member of the employee’s immediate family, or a member of the employee’s household, who requires care or support because of:

   (i)a personal illness, or personal injury, affecting the member; or

   (ii)an unexpected emergency affecting the member.

4. The term “paid personal/carer’s leave” is defined by s 12 of the Act as meaning, “paid personal/carer’s leave to which a national system employee is entitled under s 96”. The entitlement under the Act to 10 days of personal/carer’s leave for each year of service is, like annual leave, a composite entitlement to paid leave. Personal/carer’s leave cannot be cashed out except under the terms of an award or enterprise agreement, and can only be cashed out in respect of accrued leave in excess of 15 days: s 100 and s 101(2)(a).

   Compassionate leave

5. Mr Rossato makes a claim for compassionate leave for the period in early March 2018 when his partner was hospitalised. That claim arises under s 104 to s 106 of the Fair Work Act. The term “compassionate leave” is defined by s 12 of the Act as meaning “compassionate leave to which a national system employee is entitled under section 104”. The entitlement to compassionate leave is also an entitlement to paid leave, because the employer has an obligation under s 106 of the Act to pay the employee for the employee’s ordinary hours of work in the period of leave. The statutory entitlement to compassionate leave was supplemented by clause 19.12.4 of the Enterprise Agreement, which provided that payment for compassionate leave should be “at the amount a permanent FTM would reasonably be expected to be paid if the FTM had worked for the period of paid leave”.

   Public holiday pay

6. As to public holidays, an employee is generally entitled to be absent from work on a public holiday, subject to an employer’s ability to make a reasonable request that the employee work: s 114. If an employee is absent from work on a public holiday, the employee is entitled to be paid at the base rate of pay for the employee’s ordinary hours of work on the day: s 116.

   The purpose of the payments under the contracts of employment

7. In examining the purposes of the payments made to Mr Rossato under the contracts of employment, it is necessary to acknowledge, as Bromberg J and White J have explained, that the terms of the NOCEs were not uniform. However, the differences in terms do not affect my conclusions in relation to whether the payments under the contracts can be offset against the entitlements that Mr Rossato claims and which are the subject of this proceeding.

8. The present case bears some similarities to the situation that arose in TransAdelaide. The objective purpose of the payments of remuneration to Mr Rossato under each of the six contracts of employment was to discharge the contractual obligations to pay wages at the agreed hourly rates that were fixed by the NOCEs. I do not consider that the entitlements that Mr Rossato now seeks were within the agreed purposes of the contractual payments. While at a general level of abstraction it might be said that a purpose of the payments of wages under the contracts was to discharge corresponding statutory obligations including those under the Enterprise Agreement, in my view it formed no part of those purposes to discharge statutory obligations to give Mr Rossato paid annual leave, paid personal/carer’s leave, paid compassionate leave, or pay in respect of a public holiday on which Mr Rossato did not attend work. The remuneration was calculated by reference to specified flat hourly rates of pay, and on the basis that entitlements such as those that are now claimed were not available. For the reasons given by White J, the flat hourly rates of pay provided for by the first, second, and third NOCEs might be said to include an identifiable casual loading of 25% referable to the base rate of pay for a casual FTM, which included percentages allocated to annual leave, and personal leave. However, the contractual significance of those terms is another question. That is because the employment relationship that was created by the contracts of employment was not one under which Mr Rossato was a casual FTM for the purposes of the Enterprise Agreement. But whether or not there was an identifiable and applicable casual loading, I do not consider that the weekly wages paid to Mr Rossato and the entitlements that he claims in this proceeding had a close correlation in purpose. That is because the wages were not paid on account of any such entitlements, and any loadings that were incorporated were ostensibly paid on account of the absence of those entitlements. In reaching this view, I am persuaded by the reasoning of Doyle CJ in TransAdelaide in the passages to which I have referred at [993] above.

9. Furthermore, there are two features of the legislation that militate against accepting WorkPac’s submissions that it can offset wages, including wages said to include a casual loading, against payments referrable to leave entitlements. First, as I have identified above, the entitlements to leave were composite entitlements to paid leave. The statutory obligations of the employer under s 90(1), s 99 and s 106 of the Act in respect of a period of paid leave during the term of the employment were to pay Mr Rossato at his base rate of pay for his ordinary hours of work in the period. The leave entitlements under the Act were supplemented by the Enterprise Agreement, but not in a way that changed the character of the entitlements. There was thus no correlation between the payments, and any leave in fact taken, or liability under s 90(2) of the Act to pay a sum on account of accrued leave at the end of the employment. The second feature is the prohibition against cashing out annual leave and personal/carer’s leave in s 92 and s 100 of the Act. These provisions form part of the statutory framework, acknowledged by clause 1 of the General Conditions, in which the objective purpose of the payments at the agreed hourly rates is to be evaluated. The prohibitions on cashing out tell against any finding that the contracts had the effect of appropriating any part of Mr Rossato’s weekly wages to his entitlements to paid leave. Having regard to all these circumstances, it is difficult to see how the parties, by the contracts of employment, have succeeded in appropriating any part of Mr Rossato’s remuneration to his entitlements to paid leave.

   Fair Work Regulations, reg 2.03A

10. White J has set out the text of reg 2.03A of the Fair Work Regulations at [939]. I agree with White J that none of Mr Rossato’s claims is in lieu of an NES entitlement, and that therefore reg 2.03A is not engaged in the present case. In addition, I do not construe reg 2.03A as affecting the substantive law to be applied in the adjudication of a claim to have a loading amount taken into account. The regulation confirms that an employer may make a claim to have a loading amount taken into account, but it does not purport to alter the substantive law that is applicable to the determination of such a claim. This construction is supported by the text of reg 2.03A(2) and (3), especially when construed in the context of the explanatory statement to the Fair Work Amendment (Casual Loading Offset) Regulations 2018 which added reg 2.03A, and which included the following passage (emphasis added) –

    As the Amending Regulations are declaratory in nature, they apply to employment periods before, on or after the commencement of the Amending Regulations (i.e. when the Principal Regulations are amended). For the purposes of subsection 12(2) of the Legislation Act 2003 (Legislation Act), the retrospective application of the Amending Regulations does not disadvantage any party to the employment relationship as it is merely declaratory of the existing law in relation to the circumstances for which a claim to have the payment taken into account may be made. The amendments do not change the existing rights of an employer to make a claim, nor do they change the factors that a court must have regard to in determining whether a payment made may be taken into account in any particular factual circumstances.

11. An explanatory statement must be approved by the rule-maker and be laid before each House of Parliament: Legislation Act 2003 (Cth), s 15J(2)(a), s 39. The explanatory statement is therefore a legitimate part of the background context against which the regulation is to be construed.

12. For the above reasons, reg 2.03A has no application to the resolution of the substantive questions that arise in relation to WorkPac’s claim to offset any part of the remuneration that it paid to Mr Rossato against the entitlements that he claims.

    Conclusion

13. Subject to hearing from the parties, I agree with the declarations proposed by Bromberg J, and would otherwise dismiss WorkPac’s claims.

I certify that the preceding seventy-five (75) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wheelahan.

Associate:       

Dated:       20 May 2020