High Court says contract is king

  • The High Court has overturned two Full Federal Court decisions by ruling the terms of the written contract determine the character of the employment relationship.
  • The High Court found that ‘expectation’ falls short of the ‘firm advance commitment to continuing employment’ that distinguishes permanent employment from casual employment.
  • The impact of this decision extends beyond casual employment. Employers should use comprehensive employment agreements for all employees to establish a clear framework for the legal entitlements.

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In a decision crystallising the importance of the terms of employment contracts, the High Court of Australia (‘HCA’) has determined that the Full Federal Court of Australia (the ‘FCA’) wrongly decided the cases of WorkPac and Skene and WorkPac and Rossato because the decisions should have looked to the terms of the written contract to determine the character of the employment relationship, rather than looking at the conduct of the parties to the employment relationship. When it comes to determining whether or not an employee is a casual or permanent employee, the contract is king.

From the outset, it is important to note that the recent amendments to the Fair Work Act 2009 (the ‘FW Act’) to include a definition of a ‘casual employee’ did not apply to Mr Rossato due to an exception related to Mr Rossato's previous FCA decision.

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