WorkPac Pty Ltd v Rossato & Ors [2021] HCATrans 84 (13 May 2021)

Last Updated: 13 May 2021

[2021] HCATrans 084

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Brisbane No B73 of 2020

B e t w e e n -

WORKPAC PTY LTD ACN 111 076 012

Appellant

and

ROBERT ROSSATO

First Respondent

MINISTER FOR JOBS AND INDUSTRIAL RELATIONS

Second Respondent

CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION

Third Respondent

MATTHEW PETERSEN

Fourth Respondent

KIEFEL CJ
GAGELER J
KEANE J
GORDON J
EDELMAN J
STEWARD J
GLEESON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 13 MAY 2021, AT 10.00 AM

(Continued from 12/5/21)

Copyright in the High Court of Australia

____________________

KIEFEL CJ: Yes, Mr Murdoch.

MR MURDOCH: Yes, thank you. Your Honour, if I could return at the outset to a question that you asked us towards the end of yesterday in terms of what is a maximum term employee.

KIEFEL CJ: Yes.

MR MURDOCH: We have checked the material and, on our reading, that term is not defined. However, by way of explanation, your Honour will recall that the terms and conditions document referred to “casual or maximum term employee” and, in our submission, the reference to maximum term employee is in distinction to a true fixed term employee, in the sense that a maximum term employee would be a person who is engaged for a period, say six months, but within the contract, there is the capacity to bring the employment to an end within the six months. So, it is a maximum term which can be brought to an end. As I said a moment ago, compared to a situation where an employee is employed for a six‑month period ‑ ‑ ‑

KIEFEL CJ: Which they are obliged to complete.

MR MURDOCH: Quite, yes. Now, of course, here, we do not contend that Mr Rossato was a maximum term employee because when one looks at each of the NOCEs, they do not have a definite or maximum period that is applied. But that does not mean, of course, on our argument that because he is not “maximum”, he is “casual”. That is because we say that what is important is not the label that is put on, for example, each of the notices of offer stating notice of offer of casual employment. What is important is what are the obligations that exist under the contract wherever its terms may be derived from.
Now, in that respect, I had begun yesterday afternoon to move from the terms and conditions document to step through the respective notices of offer documents. Could I ask in that respect for your Honours to please go to page 332 in the book of further material.

GORDON J: Is this the sixth agreement?

MR MURDOCH: No, the first agreement, your Honour.

KIEFEL CJ: I thought it was the fifth. Yes, I think it is the fifth.

MR MURDOCH: I am sorry, 232, I beg your pardon. What we wanted to draw your Honours’ attention to, in particular, in respect of this document, was that when one looks on the first page, there is a reference to “Please Note” and then, towards the bottom, there is the statement:

Your ordinary hours of work shall be a standard work week of 38 hours. Additional reasonable hours may be worked in your rostered arrangements.

So, we say, it is made plain by the notice that what is being offered and what is accepted by commencement is employment, pursuant to rostered arrangements. That is further confirmed, we say, when one goes to page 233. Up the top there is a reference to “Shift Structure” and your Honours will note that the box “Alternating Shift” has been crossed which we say is, again, an indication that what has been offered and what has been accepted is ongoing employment on a roster on an alternating shift basis.

Of course, what is missing from this document is the rosters in question. If I can ask your Honours, please, in that regard, to turn back to page 218 and what you will see there – as I have touched upon briefly yesterday afternoon – the email from the representative of WorkPac to Mr Rossato which contains – when one goes to page 219 – the paperwork referred to therein which includes, relevantly, the notice of offer that we took you to a moment ago, but also a roster.

The roster, which is at page 223 – and if your Honours turn to that, please, what your Honours will find there is a roster that provides for alternating shifts and that roster you will see is a roster that covers the period from 23 April.

EDELMAN J: Are you relying on this roster as a contractual document?

MR MURDOCH: Yes.

EDELMAN J: Is there a finding in the Full Court that the roster was a contractual document?

MR MURDOCH: There was a finding on the part of Justice White, which we will take you to in a moment. But we say that even if this document was not able to be considered to be part of the contract, it would at least be an objective background fact that could be taken into account in determining what the unspecified alternating shift and roster is, for the purposes of the notice which was provided to Mr Rossato and accepted. So on either basis we say the roster can be relied upon to ascertain what was the nature of the commitment that Mr Rossato gave in terms of ongoing work. We accepted the offer. And I will take you to the finding in a moment.

Before I get to that, though, I just wanted to go back to a matter that I raised yesterday in terms of the issue of ambiguity. We say that the issue of ambiguity really arises from what was said by Justice White at paragraph 526, and his Honour says there that:

At the very least in the present case there is uncertainty about the nature of the commitment to the future employment in each contract which makes it appropriate to have regard to the factual matrix in which each contract was made.

Et cetera.

GORDON J: Is that the right ambiguity? Is it the ambiguity about the terms or about the nature of the relationship?

MR MURDOCH: Well, what we say the ambiguity is, is in respect of not so much the length of the assignment, because that has been at least referred to in the document, but rather within the assignment what are the days in the week, or the patterns that are to be worked by the employee to complete the assignment. So we say that there is ambiguity in respect of what is, as Justice White says there, the nature of the commitment that Mr Rossato has made under the contract.

EDELMAN J: Do you accept that “ordinary hours of work shall be a standard work week of 38 hours” cannot be read literally – in other words, that it has to mean at least that the ordinary hours of work on average, when averaged over the period of the assignment?

MR MURDOCH: We say that that is the proper way to read that because of the reference to roster arrangements, alternating shifts.

EDELMAN J: So it is 38 hours averaged over the whole of the assignment or averaged over what period?

MR MURDOCH: What it says is your ordinary hours of work shall be a standard work week of 38 hours. Additional reasonable hours may be worked in your roster arrangements. So it is not a fixed work week of 38 hours. It can be increased.

EDELMAN J: No, but if one looks at the roster, for example, there will be some weeks where there are zero hours worked.

MR MURDOCH: That is so.

EDELMAN J: So if the roster is going to be used as part of the contractual matrix, at least, you cannot read that literally. What I am asking you is: what does it mean then?

MR MURDOCH: I would accept that it cannot be read literally in that context where one is working over a roster. It has to be averaged over the roster. In terms of the objective facts, which we say can be looked at to resolve the ambiguity, we would point to the matters that Justice White took into account. At paragraph 541, his Honour stated that:

both WorkPac and Mr Rossato can be taken to have been aware of the manner in which mining was undertaken at Collinsville.

Namely:

mining was undertaken by production workers . . . working in established shifts.

His Honour stated at paragraph 566, if I can take your Honours to that, by reference to the rosters, that he:

was being offered work which would involve him working regular and predictable hours of shift work in accordance with the roster, subject to the possibility that he be required to work “additional or replacement shifts or rosters as agreed to during the engagement”. That was the pattern of work offered to Mr Rossato and on which he agreed.

Now, going back to your Honour Justice Edelman’s question before about the finding, we would say that what is said there in paragraph 566 is in fact more than a reference to an objective background fact but it is a finding in respect of a roster being part of the contract.

GLEESON J: Well, it has to be read subject to paragraph 564, does it not?

MR MURDOCH: That is so, but his Honour does say there:

At the very least, that material formed part of –

but we say that, when one looks at 566, his Honour has gone further. But, in any event, we would say that because of the way in which the offer was made, including the roster, it was open to, and be accepted as being part of the contract, as opposed to simply an objective background fact.

I am reminded that, if one goes to paragraph 573, notwithstanding what Justice Gleeson pointed out a moment ago, it seems that his Honour has made a finding on the issue in the very last sentence there:

The effect is that Mr Rossato agreed to work shifts in accordance with the roster provided or in accordance with any replacement roster.

STEWARD J: Mr Murdoch, the roster may establish a pattern of work, but this is a roster, I take it, that was applicable to both permanent employees of Glencore and other employees, to use a mutual expression, and it is just a roster allocating crews for work at different times. Does it go to the question of firm commitment?

MR MURDOCH: We say it does, your Honour, when taken with the fact that the notice of offer document refers to rostered arrangements – refers to alternating shifts – and then the final piece in the jigsaw puzzle, at it were, is the provision with the offer of a roster that provides for alternating shifts.

STEWARD J: But, is this not simply telling Mr Rossato that, if you are going to take up this assignment, you will have to work within the confines of the rosters that Glencore has for its workforce?

MR MURDOCH: We say it goes further than that.

STEWARD J: Why?

MR MURDOCH: Because he was provided with a roster that he agreed to work.

STEWARD J: Yes, in the confines of Glencore’s roster system. So, it establishes perhaps a pattern of work, yes, but I am not sure about commitment.

MR MURDOCH: Well, within the confines of WorkPac’s roster system, which is ‑ ‑ ‑

STEWARD J: It is not WorkPac’s, this is Glencore’s, is it not?

MR MURDOCH: I am sorry, within the confines of Glencore’s roster system, which is a roster system which involves employees working on alternating shifts and that is what he has been provided with.

GORDON J: It does not assist either in the indefinite term argument, either, does it, because it says nothing about the term of the contract?

MR MURDOCH: No, it does not, although the roster itself, though, is for, as can be seen from it, an extensive period.

GORDON J: But it is Glencore’s roster – generic, subject to variation.

MR MURDOCH: That is so but, notwithstanding that, it is the roster that is provided with the offer and accepted.

I am reminded that if one goes to page – sorry, I withdraw that. If I can then move – I am still under the first contract. Mr Rossato was, whilst working under the first contract, provided with a second roster and that was provided by Glencore. That roster can be found at page 238. Once again it is a long‑term, in terms of for a calendar year, roster. Once again, alternating shifts.

But you will see on page 238 that at least in respect of this roster that has been provided, Mr Rossato – it is difficult to read, but if your Honours go to the third column in, “A Crew”, about two‑thirds of the way down he is there listed as being a member of A Crew. But we say that when one reads the provision of that roster with ‑ ‑ ‑

EDELMAN J: How are you relying upon this subsequent roster which comes two years after the contract?

MR MURDOCH: No, that subsequent roster comes – that is in respect of 2015.

EDELMAN J: Yes.

MR MURDOCH: It is provided to him towards the end of 2014 by Glencore. So, I accept it is after, but it is not two years after.

EDELMAN J: But how would one rely upon that, other than as post‑contractual conduct?

MR MURDOCH: Well, we say that if one goes back to the terms and the umbrella terms and conditions document - go to page 132, go to clause 2, “Employee”:

The individual . . . as per the terms and conditions set out in this document, and the notice, to carry out work assignments under the direction of WorkPac’s clients.

So we would say he is obliged by the umbrella document, once working under a contract, to comply with direction of WorkPac’s clients in respect of assignments. That includes, we would say, the provision of that roster to him. Then if one goes to 7.4, “Shiftwork” - this is on page 136:

The employee will be required to work shifts and or rosters as prescribed . . . The employee may be required to work additional or replacement shifts or rosters as agreed to during the engagement.

The agreed facts are that the roster that I have taken your Honours to, provided towards the end of 2014, was then worked by the employee.

STEWARD J: What is the relevance of that to the construction of the documents? It is post‑contractual conduct.

MR MURDOCH: It is post‑contractual conduct, but it is the acceptance by Mr Rossato of a roster for a long period of time, which sets the alternating shifts that he is to work.

STEWARD J: But he has already accepted a roster when he was sent the email, so what is the relevance of this much later ‑ ‑ ‑

MR MURDOCH: The relevance of the later roster is that he is obliged, once accepted, under the terms and conditions, to work that roster ‑ ‑ ‑

EDELMAN J: Provided he agrees to it under 7.4.

MR MURDOCH: That is right, and so ‑ ‑ ‑

EDELMAN J: So this is really showing a degree of considerable flexibility in the contractual arrangement that rosters can vary, parties can agree to change their arrangements over the period of the assignment.

MR MURDOCH: Parties can agree to change their arrangements, but once that agreement has been made, one then looks at what has been agreed. So from a temporal perspective, one has the first roster that is agreed to, and then in terms of the second roster, that is also a roster that has been agreed to which we say, when one looks at what has been agreed, is a firm advance commitment to work that roster. So yes, it can change, but the change is from one firm advance commitment to a subsequent firm advance commitment. But at all relevant times there exists, we say, a firm advance commitment.

GAGELER J: Mr Murdoch, do you accept that you have to show a contractual promise on the part of WorkPac to provide ongoing work for an indefinite period?

MR MURDOCH: What we contend needs to be shown is an obligation under the contract for ongoing work to be provided.

GAGELER J: For an indefinite period? Do you accept that?

MR MURDOCH: Yes.

GAGELER J: So the answer to my initial question is yes, I think.

MR MURDOCH: That is so, but the reason why I paused, with respect, your Honour, is because the obligation - and one can see this by way of example from the subsequent roster - does not necessarily arise from a positive act by WorkPac because in respect of the second roster ‑ ‑ ‑

GAGELER J: I can see how the rosters give you a pattern of work – an agreed pattern of work. For the moment, I cannot follow how the rosters assist in showing an indefinite period.

MR MURDOCH: In respect of the – can I just deal with the second roster?

GAGELER J: Yes.

MR MURDOCH: If one goes to 7.4:

The employee may be required to work additional or replacement shifts or rosters as agreed to during the engagement.

Once that has been agreed to, that is the roster that is to be worked. That is what the employee has agreed to do, and it is indefinite.

KEANE J: In respect of each assignment which he undertakes.

MR MURDOCH: That is so.

KEANE J: It is not a promise that there will be further assignments.

MR MURDOCH: But within the assignment.

KEANE J: Yes, and within the assignment the obligation to work in accordance with the rostered system is absolutely inconsistent with the notion that he might be an independent contractor. It certainly means as an employee. But we are not worried about whether he is an employee or an independent contractor. Everyone is in furious agreement that he is an employee. It is what kind of employee he is.

MR MURDOCH: That is so.

KEANE J: The fact that he is under the sort of control that makes him an employee while he is carrying out an assignment does not establish a promise that there will be further assignments.

MR MURDOCH: It does not establish that there will be a promise that there will be further assignments but, whilst working under the particular assignment, there is – for the purposes of that assignment – a firm advance commitment.

GORDON J: But it is not indefinite. This is the point. There are two questions, are there not? There is the question of, you just take the NOCE and you take even the roster. Where is the obligation, to pick up the words of Justice Gageler, that imposes upon WorkPac an obligation to provide your client with an indefinite term of employment?

MR MURDOCH: We cannot point to that obligation.

GORDON J: Right.

MR MURDOCH: But what we can point to is, within the assignment, something that is different from and separate to the situation where the employee is working on demand or irregularly within the assignment. Within the assignment he has the roster – that is what he is to work for the period of the roster. So, I cannot point to something that makes it indefinite beyond. But I can point to something that makes it not irregular within.

STEWARD J: Is that sufficient?

MR MURDOCH: We say yes.

STEWARD J: Why?

MR MURDOCH: Because ‑ ‑ ‑

STEWARD J: How does it show the necessary degree of the indefinite commitment for ongoing work?

MR MURDOCH: What it shows is that – going back to the Hamzy test – there is a firm advance commitment for that period.

STEWARD J: But what about the quality of “indefiniteness” – if I can use that word.

MR MURDOCH: A firm advance commitment can be a firm advance commitment for a period, or it can be ongoing. But what it is distinct from is the irregularity, episodic nature, et cetera.

EDELMAN J: The typical example that you relied upon yesterday was the relief teacher who gets a fixed period of – at least at the start, of two months’ regular episodic work, regular duration, and that is your typical casual contract.

MR MURDOCH: Well, that example has to be looked at in the context of all of the circumstances that are referred to in that example, and it was not just an example of someone doing two months, it was starting out doing this, then two months, then doing that. There was a pattern of irregularity, whereas here we are not dealing with a situation like that. We are dealing with a series of six separate contracts ‑ ‑ ‑

KIEFEL CJ: But you cannot add them together and say that is permanency. You are not doing that, are you?

MR MURDOCH: No, I am not. I am seeking to demonstrate that whilst one does not add them together, what one can do and ought to do, because they are six separate contracts, look at them independently and classify what each of them is. Just because there are six separate contracts does not mean that, when looked at individually, each of them does not provide for a firm advance commitment.

Can I just go to another of the objective background facts that Justice White relied upon, and that can be seen from paragraph 543. His Honour took into account that the mine was one that was remote, and that:

Mr Rossato lived “over an hour” away from the Mine . . . would be “Drive In – Drive Out” and would reside in the accommodation provided by Glencore during each swing of shifts.

His Honour considered that such an accommodation arrangement was:

inconsistent with an expectation of the employment being intermittent or discontinuous and, further, with Mr Rossato having a choice as to whether to work on a particular day.

His Honour was of the view that it was unlikely that the appellant:

contemplated that Mr Rossato would be provided with accommodation free of charge and yet could choose –

to work each day. Now, again, that is an objective background fact his Honour has taken into account in respect of the particular contract in issue, that being the first contract. His Honour also took into account, at paragraph 586, that there was:

no indication that Mr Rossato was to be told each day or at the commencement of each swing of shifts whether or not he was required, or that he had to check the daily or periodic work requirements.

That perhaps goes back to the issue that I think, with respect, Justice Keane raised with me, that one can, in my respectful submission, look at what was the commitment within the one assignment. Was it a commitment to work regular shifts as programmed by the roster, and if so, we say that there was a firm advance commitment for the purpose of that assignment, or, if it was not that, it would be something that could be regarded as being casual because it would be truly a situation where the employee was not obliged to turn up and work a particular shift, but it was more a matter of him being told on a day‑to‑day basis or a shift‑by‑shift basis whether he would be required or not. If it was that latter situation, it would lack the firm advance commitment, but because we say it is the former situation, the firm advance commitment, for the purposes of the particular contract, exists.

That is all we wish to say in particular in respect of the first contract. If I can ask your Honours now to go to the second contract and then we will briefly deal with the third contract. The second contract is at page 276. It is in materially similar terms to the first contract. In terms of the objective background facts, his Honour noted that Justice White, at page 595, that Newlands, which was the site at which the work was to be conducted under this contract, was just over two hours’ drive from Mr Rossato’s home, which his Honour found objectively made it even more impracticable for him to be driving to and fro each day, requiring a stay at the mine, and further indicating regularity as opposed to irregularity at work.

Mr Rossato, in respect of this contract, was provided with the 2015 site roster. That can be seen at page 282. His Honour found at paragraph 598 that:

the format of the roster conveyed an established scheme of work at the Newlands Mine and indicated that Mr Rossato would be working in an organised, predictable structure of shifts.

Now, in terms of the third contract, that is at page 294. This was also a contract in similar form to the first and second so we do not repeat the submissions which we have made in respect of those. However, we do note that when this contract was provided Mr Rossato had already been provided with the roster for 2016 that we took you to a moment ago. So what we say the work of this particular document was, was not to change the working arrangement but to do one primary task only, that being to change the rate of pay, which can be seen from the different rate that is set out on page 295.

STEWARD J: Does not each position and title change as well?

MR MURDOCH: I beg your pardon, it does.

STEWARD J: Yes.

MR MURDOCH: It does, yes.

STEWARD J: Thank you.

MR MURDOCH: So with respect to the 19 February 2016 letter, what we say in respect of that is that considering its contents, the other known objective background facts which included Mr Rossato being given a roster for 2016, and the terms and conditions document, in particular clause 2 and clause 7.4 that we have taken you to already, the situation of a firm advance commitment remained pursuant to this contract as well.

Now, can we then move to deal with the fourth contract, which is on page 302. It of course is different in terms to the first, second and third, because it does not provide any statement concerning the length of the assignment. When one looks at the first page, ad over to the second page, it not only describes Mr Rossato as a casual, but expressly states that the hours that he may be required to work may vary from day to day and week to week and that he had an ability to refuse and cancel shifts and indicated that the number of hours he would work would be dependent on his availability, WorkPac’s own business needs and the like. However, Mr Rossato was, one can see from the first page, page 302, provided with a commencement date and start time.

KIEFEL CJ: But one of the differences with the preceding offers, notice of offer, is this one is entitled “Notice of Offer of Casual Employment – Flat Rate”.

MR MURDOCH: That is so.

KIEFEL CJ: Is that important?

MR MURDOCH: Well, it confirms that he is a casual employee employed on a flat rate.

KIEFEL CJ: Yes.

MR MURDOCH: When we come later on to deal with in terms of the relevance of being employed on a flat rate in terms of the capacity to separate out the elements of casual loading, that will be important. But we do not take anything more from that, in terms of the firm advance commitment aspect of things.

EDELMAN J: Do you accept that the description “casual” has some role to play in the characterisation of the nature of the employment - the fact that the parties are – obviously it cannot be determinative, but the fact that the parties are attaching the label “casual” to the employment?

MR MURDOCH: It has some role to play, we accept that. But what we say is that, consistent with the authorities, the label is not determinative, and the task is to look at what, as a matter of law and fact, is actually agreed.

KIEFEL CJ: Well, to look at the terms rather than the heading, perhaps. But at the top of 303 it said:

There may be some regularity in your shifts as a result of –

the working hours:

requirements but this does not change the fact that you are a casual employee.

This somewhat undermines your previous arguments, does it not?

MR MURDOCH: The argument becomes harder with respect to the subsequent contracts, we accept that. Now, in respect of that, what we do note however is that, whilst there was not a period nominated for the assignment, Mr Rossato was provided with an assignment for Glencore Collinsville Mining A Crew – so he was provided with an assignment to A Crew – the terms and conditions document, the umbrella document, remained the same. But, once again, there is not detail provided as to what the actual working hours will be. Whilst he is given a commencement date and start time, one has to look beyond this document to discern what are the hours, even in respect of the first shift that Mr Rossato has agreed to perform.

So, consistent with the approach taken by Justice White, we say that again one can look to the objective background facts to seek to discern the extent to which there was to be continued employment. His Honour noted at paragraph 607 that part of the objective background facts included that:

Both parties knew the system under which production operators worked and, in particular, of the shift structure –

being rosters in advance:

providing continuity, regularity and predictability of the work.

Now, at paragraph 611, his Honour noted that the “absence of provision of a roster”, at commencement at least, gave force to the proposition that the contract was “not wholly in writing” and that a term would be implied that Mr Rossato would work the roster implemented by Glencore. However, we say that whilst it was open to his Honour to take that approach, one does not need to go that far because clause 2 remained and clause 7.4 remained.

What then happened was, in terms of the facts, that Mr Rossato was, whilst working under this notice of offer of casual employment, provided by Glencore, we say consistent with clause 2 and with clause 7.4, with a series of long‑term rosters that applied to his employment and, without taking your Honours to the detail of those rosters, we note that they are referred to in the agreed statement of facts at paragraphs 6.82, 6.83, 6.90, 6.91, 6.96A – and the rosters themselves are contained at pages 342 for 2017 and 344 for 2018.

So, whilst we accept and acknowledge that under the notice of offer document one does not see a roster that itself projects a continuous pattern of shifts going forward, what one does see, pursuant to the contractual arrangements, is the provision over time of such rosters. So, we say that Mr Rossato was, pursuant to the contract with WorkPac, obliged to work the series of long‑term rosters that were provided to him by Glencore.

Now, we acknowledge that within each of the fourth, fifth and sixth contracts they contain – as one can see from page 303 – the express statement that:

As this is a casual assignment, you have the ability to refuse and cancel shifts . . . or terminate your assignment as set out below.

There is then a reference to:

You may terminate your employment in accordance with the terms of the Industrial Instrument and applicable law.

But, more importantly, for present purposes, it is stated there what Mr Rossato is to do if he cannot attend a shift:

If you wish to cancel a shift, you must contact WorkPac . . . as soon as possible before the start of the shift you wish to cancel . . .

You must directly speak with your WorkPac Contact –

et cetera. However, we say that notwithstanding that he had the capacity to cancel a shift, that does not alter the fact that the firm advance commitment arose out of the rosters that he was provided and that is because the default position was, pursuant to clause 2, clause 7.4, to work the rosters that he was provided. It was only if he wished to step out of that default position that the issue of having the capacity to cancel or not attend arose.

So, the default position was an obligation, we say, to work the rosters as provided with the capacity for him to take a step to bring it to an end. But just as we say that the capacity of WorkPac to bring an assignment to an end did not mean that there was still ongoing employment, similarly, the capacity of Mr Rossato to not work a shift – or to cancel a shift – does not cut across the fact that, until he does that, he is under an obligation to work the roster as provided.

GORDON J: When you say “work the roster as provided”, I do not want to get into all of the agreed facts, but it is clear from what has been agreed that the roster was not actually followed, so what do we do, how does that sit with that? Where does the analysis stop?

MR MURDOCH: Well, there are rosters that ‑ on a few occasions, the roster was not followed, but absent very few occasions, Mr Rossato worked the rosters that were provided by Glencore. We say, by working those rosters, consistent with clause 2 and 7.4, he agreed to work that pattern and gave that commitment.

GORDON J: Thank you.

MR MURDOCH: In terms of the fifth and sixth contracts, we have referred to those to an extent already, there is nothing that we wish to say in respect of those, than what we have said in respect of the fourth contract. Now, if we can move away from the ‑ ‑ ‑

STEWARD J: Just before you do that, is it possible to construe your roster point as a firm commitment from Glencore to WorkPac, rather than from WorkPac to Mr Rossato?

MR MURDOCH: We would say it is a firm commitment from WorkPac to Mr Rossato, because the agreement ‑ ‑ ‑

STEWARD J: Does WorkPac have knowledge of Glencore’s roster? I suppose it does, it sent them to him in the first place. What about later on?

MR MURDOCH: Well, I would need to go back, and we will, check the agreed facts specifically, given the period of time, but what I would say is that WorkPac paid him pursuant to those rosters, so one infers that it has knowledge of the rosters that he is working. But, in any event, your Honour, going back to what is provided in clause 2 and clause 7.4, under the agreement that Mr Rossato has with WorkPac, he agrees to work those rosters. So that at the least, we say, draws the obligation of WorkPac in.

If I could move now to deal with the second basis upon which we say that the firm advance commitment can be identified, and this is what has been referred to as the overall characterisation approach, and at the outset what the nature of our submission is that, if the requisite firm advance commitment is not identified as a matter of construction of the contracts, it is able to be identified based upon an overall characterisation of Mr Rossato’s employment, by reference to the conduct of the parties, and the real substance, practical reality and true nature of the way in which the employment was carried out.

We wish to say at the outset in respect of this task that what is in issue is the type of employment as opposed to the construction of the contract. This approach, we say, is supported by principles that have been applied by both Full Courts in the Federal Court and also by an older authority of this Court, being Foster, that I will take you to in a moment. It is also supported by English authority.

The best place to start in terms of its contemporary distillation by the Federal Court is to take your Honours to the Full Court’s decision in the Skene case at volume 6, tab 67 and ask your Honours, please, to go to paragraphs 180 to 183. At paragraph 180, the Full Court there referred to:

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.

Their Honours note that that is what they describe as:

the settled approach to the question of whether a person is an employee ‑ ‑ ‑

KIEFEL CJ: Do I take it from the case you have taken us to that this approach is applied where it is argued that casual employment has over time morphed into something more permanent? That seems to be the lead‑in to paragraph 180 from paragraph 178.

MR MURDOCH: Yes.

KIEFEL CJ: There has been a change in the relationship. What may have started as a pure contractual relationship has by dint of the working arrangements and probably not reduced to writing but the contractual relationship between the parties has seemed to be altered by reference to working habits, what is required, what is promised. Is this what you are arguing?

MR MURDOCH: That is one way of describing it.

KIEFEL CJ: Is that the contention that you are applying this approach towards what has occurred over time here, which might have started as casual employment, has become permanent? Is that something you are relying upon?

MR MURDOCH: That would be a fallback position. We put it higher than that. Why I paused was your Honour’s reference to “morphing into”.

KIEFEL CJ: I was going to say it would be particularly difficult for you here because, as you acknowledged when you went through the notices of offer, if there was some doubt about the casualness of the arrangement in a contractual sense, by the time you come to the last three notices of offer, it is evidently clear from the terms of the agreement that they are talking about a casual employment and not permanent.

That no doubt presents a difficulty, if you are taking up the kind of argument that this approach has been applied to. I am having a little difficulty understanding where this approach - what conclusion you are contending for as a result of this approach.

MR MURDOCH: The conclusion that we are contending for as a result of this approach is that, rather than the relationship developing as it progressed into permanent – I beg your pardon, into employment that is other than casual – this is a situation where standing back and looking at the actual conduct of the parties, and the actual working arrangements, it was not as a matter of practical reality a casual working arrangement. We do not suggest that that is something that developed. We say that that is something that can be ascertained here, right from the beginning of the relationship.

KIEFEL CJ: That is not to accord primacy to the contract; it is to suborn the terms of the contract to how the parties conducted themselves in what you would say amounts to contractual relations. Is this a kind of estoppel by convention ‑ ‑ ‑

MR MURDOCH: No.

KIEFEL CJ: ‑ ‑ ‑ that the parties adopted a conventional approach to their working and contractual relationship, and that became the convention that overtook the original agreement?

MR MURDOCH: No, your Honour, we put it on a more primary basis than that. It is as – I was going to say deceptively simple, but that is perhaps not what I want to say. It is as simple as this. What is in issue in this case is the question of whether or not the particular entitlements that Mr Rossato claims have been displaced by reason of him being a casual.

Of course, these are obligations that under the NES cannot be displaced and the only relevant circumstance where they cannot be due to him is where he is, for the purpose of the Fair Work Act, a casual employee. And we go to these principles to seek to establish a conclusion that, regardless – this is, of course, our second limb ‑ but regardless of what the terms of the contract were, whatever they may have been, the actual practical working relationship that occurred was one of an other than casual working relationship.

KIEFEL CJ: But do the authorities to which you are going to refer us say that you ignore the contractual relationship in favour of observations to be drawn from the working relationship and are you saying that the working relationship does not accord with the contractual terms? Is there some disconnection between the two, is that what you are saying?

MR MURDOCH: What we are saying is that where – and remembering this is the alternative argument.

KIEFEL CJ: It is still an argument; it has got to be good.

MR MURDOCH: And I am seeking to make it so. Where the actual working arrangements are such that the employee is not working as a casual, the effect of that is that regardless, we say, of what the contract says, that the true employment relationship is one of other than casual employment.

EDELMAN J: Mr Murdoch, you told us yesterday that a firm advance commitment required an enforceable promise. If the true nature, or the practical reality is not to be tied to the enforceable terms of the contract, how does that true nature or practical reality become enforceable?

MR MURDOCH: For the purposes of the overall characterisation approach, we do not say there needs to be a contractual obligation. That is because one is not focusing upon the construction of the contract, rather, one is considering what is the actual working relationship that is in place.

STEWARD J: Mr Murdoch, are all the cases at 180 independent contractor cases?

MR MURDOCH: Yes.

STEWARD J: So how do we transpose the jurisprudence about characterisation of relationship as employment or independent contractor to what we have here, that is casual versus non‑casual?

MR MURDOCH: Well, we say that one can transpose the principles, because ultimately it is the same issue. In terms of whether or ‑ ‑ ‑

STEWARD J: Well, it is not really. One is about whether someone is an employee versus an independent contractor, which has a whole different range of tests and considerations that one looks at, whereas here it is a more confined distinction between casual versus non‑casual employment.

MR MURDOCH: Under both situations one is considering what is the true relationship that exists between the parties.

STEWARD J: But is not the true relationship that which the contract commands and defines, unless there is disconformity between the contract and what the parties are actually doing?

MR MURDOCH: That is the point that we seek to make, that if there is disconformity then ‑ ‑ ‑

STEWARD J: So you say there was disconformity here?

MR MURDOCH: That is so.

STEWARD J: There are findings about that?

MR MURDOCH: Justice Bromberg made findings about that, yes.

STEWARD J: All right. Thank you.

KEANE J: So this is not about a forward‑looking test at all, this is not – you cannot sit down when the parties begin their relationship and say the nature of this relationship is one of casual employment, because one has to wait until the parties have dealt with each other for some time, and then you can say, looking back, we can see that what they actually agreed was not really what they meant at all, or was not really what they did, so it is certainly not a forward‑looking test of the kind you put to us yesterday.

MR MURDOCH: Well, in this case, in this case it is, because right from the outset of this relationship, Mr Rossato was provided with the rosters, which he then worked, without there being any evidence of, on any day, him asking am I to work tomorrow or him being told ‑ ‑ ‑

KEANE J: But it is not about what he did, is it? It is about what he was entitled to do and what WorkPac were obliged to do and you would know that from the contract. You know what he was obliged to do and what they were obliged to do from the contract, as opposed to what actually happened from day to day. It just sounds like this is an argument that the contracts that they keep signing are in some way shams.

MR MURDOCH: It is not an argument that they are shams. It is an argument that they – the alternative argument is that they do not reflect the reality of what is happening.

GORDON J: Can I ask you a question about the principle you rely upon in 180?

MR MURDOCH: Yes.

GORDON J: In Chief Justice Allsop’s reasons that referred this matter to the Full Court, he records in paragraph 4 that:

It is important to understand that the statement of principle as expressed in [180] was obiter and not the subject of any substantive challenge in the Skene . . . WorkPac now seeks to challenge legal propositions –

Is that right?

MR MURDOCH: It was right in the context that what is said at 180 in Skene was said in the context of whether a person is an employee. But if one then goes to paragraphs 180, 182 and 183, the Full Court applies the approach to the question of whether or not the requisite firm advance commitment is absent or present by stating it must be objectively assessed, including by reference to the surrounding circumstances.

GORDON J: I think my point is more direct. Chief Justice Allsop seemed to suggest that WorkPac had conceded it below, that they wished to change their position. That is, in Skene, it says a point that counsel for WorkPac:

accepts was conceded below.

MR MURDOCH: I do not understand WorkPac to have considered that below.

GORDON J: Thank you.

GAGELER J: I am having some difficulty with what you are looking for in the overall relationship of the parties on your alternative argument. For your primary argument, you say a firm commitment is a contractual promise. For your alternative argument, you must be saying a firm commitment is something else. What is it?

MR MURDOCH: A firm advance commitment is able to be discerned from the way in which the work is being conducted.

GAGELER J: You have got to know what you are looking for. Is it an objectively determined mutual expectation? What is it?

MR MURDOCH: It is a firm advance commitment in respect of the work to be undertaken, and that, we say, can be ascertained by looking at the way in which the employment is carried out in practice. The carrying out in practice in the present case is the fact that he is given long‑term rosters, he works those long‑term rosters and there is no evidence ‑ ‑ ‑

STEWARD J: Is that commitment an enforceable commitment?

MR MURDOCH: No.

STEWARD J: So, it is something less than that.

MR MURDOCH: It is something less than that. It is the practice of how the employment is actually carried out on the ground, separate from what the contract might say. It is what is actually happening.

GORDON J: How does that sit with the legislative regime in the Fair Work Act? In this sense that it provides mechanisms for, as I understand it, really nothing more than some other form of conversion. Is that what this is directed at?

MR MURDOCH: No, it is not. If I am understanding your Honour’s question correctly ‑ ‑ ‑

GORDON J: I am being inelegant as usual.

MR MURDOCH: Well, it may well be me.

GORDON J: There is a provision in the Act for conversion, which in a sense looks at someone who has been subject to certain criteria entitled to ask for conversion to non‑casual employment. Is that not what this is? You are seeking to achieve something which the Act does not provide?

MR MURDOCH: The conversion regime was not in the Act at the time of this employment.

GORDON J: Yes.

MR MURDOCH: We say it is quite the opposite of that, because it is recognising, because of the way in which the work was conducted, that this is a person who is a casual employee regardless of what the terms of the contract may say. The work practices that the parties are engaging in demonstrate casual employment, just as in terms of the question of whether or not someone is an employee or otherwise, the contract may provide for a whole range of obligations and rights. But if one goes and looks at what the parties are actually doing, they may not be working as contractor and subcontractor, but are as a matter of fact working as employer and employee.

STEWARD J: What is the principle of characterisation that permits this test to trump the contract? Why should not the contract prevail over what you consider to be your preferred characterisation test?

MR MURDOCH: Because what is actually happening does not reflect the contract.

STEWARD J: Does not the contract include what is actually happening?

MR MURDOCH: This is our second argument and it would only be if the Court was against us on the first argument that we would say, one goes to what is actually on the ground, that being provision of rosters, him metronomically working the rosters that are provided and never once asking, am I to come back tomorrow, and never once being told, you are to come back tomorrow, working alongside the permanent employees of Glencore on the same roster day after day, month after month, year after year, when one takes into account each of the contracts.

KIEFEL CJ: That might be a convenient time, Mr Murdoch.

AT 11.14 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.28 AM:

KIEFEL CJ: Yes, Mr Murdoch.

MR MURDOCH: Just to go back to a question that Justice Gordon asked me before the break. Your Honour asked whether any of the cases referred to in paragraph 180 dealt with the question of whether a person was a casual or otherwise.

GORDON J: I think it was Justice Steward. But that is fine, I will take it on board.

MR MURDOCH: I am sorry. I apologise to ‑ ‑ ‑

GORDON J: No, there is no need to apologise.

MR MURDOCH: I have just clarified that, it is a long paragraph, but towards the end of it at about line 45 their Honours say:

The same approach is appropriate to adopt in determining the nature of the employment relationship. It is the approach adopted in MacMahon (at [38]) –

I am reminded that MacMahon was a case considering whether a person was other than casual.

KIEFEL CJ: So are we up to paragraph [11] of your outline, into the double dipping now?

MR MURDOCH: I just wanted to briefly close off in respect of the totality – and I am mindful of the time, your Honour. In respect of the totality of the circumstance point, I just wanted to note that the approach that we contend for is not inconsistent with the approach that was taken by this Court in the case of R v Foster, which we do not ask you to open up now, but that is at tab 36.

On our research, the approach adopted in that case by the Court has not been overruled and that being that - and in terms of – and of course that was a case, it was an industrial dispute, and the question was whether or not there was an employment relationship. But several members of the Court noted that regardless of what is set out in that case in great detail by the contracts between the parties, if in fact as a matter of reality the parties were acting as employer and employee, that that was to be preferred as opposed to what had been prescribed, as it were, in the contracts.

We have referred in the written submissions, also on this point, to the United Kingdom case of Autoclenz v Belcher. We have referred to what has been said in the written submissions both here and in the Full Court in respect of that authority, and we have also asked your Honours to note that what was said in Autoclenz was further considered more recently by the United Kingdom Supreme Court in Uber BV & Ors v Aslam & Ors, which is at tab 65.

We say that a consideration of both the Autoclenz and Uber decisions supports our contention that when one is considering whether or not a person is the subject of rights that are provided under employment law, it is appropriate to not just consider the terms of the contract but also the practical working arrangements to discern what the true relationship between the parties is for the purposes of access or otherwise to those statutory rights.

If we can then move to the “double dipping” argument that is put against us, can we say at the outset that the grounds that are relied upon by the appellant under the heading of “double dipping” we say ultimately do not arise because there is no identifiable casual loading in this matter. In terms of both set‑off and restitution, it would seem to us that in order for the double-dipping argument to gain traction, there needs to be a relevant overpayment of some type identified.

As we understand it from the written submissions, the overpayment which the appellant seeks to rely upon is what it refers to as the difference between the hourly rates paid to Mr Rossato and those payable to a comparative permanent flat rate FTM or field team member.

The difficulty with the case being put on that basis by the appellant is that there is no evidence within the agreed facts of any persons who were engaged by WorkPac at any time as a permanent FTM, be it under the EA or under an NOCE such as that to which Mr Rossato was subject. So no comparison, we say, can be made in terms of the difference between what was paid to him and what would be payable to a permanent FTM, if such a person existed.

Of course, Mr Rossato was not paid the enterprise agreement rates, so the difference, we say, cannot be derived from a comparison between what he was paid and what may have been paid to a permanent field team member employed under the enterprise agreement, but as we say, in any event there is still no evidence as to what such a hypothetical permanent team member would have been paid.

We understand from paragraph [33] of the appellant’s outline that there is an alternative approach that is sought to be utilised to identify the difference, and that is to appropriate Mr Rossato’s casual loading. We say that there is a difficulty with that approach as well, and the difficulty is that the casual loading, if any, we say, within Mr Rossato’s rate of pay, was not capable of identification on the material before the Full Court.

Now, we start in that respect by noting that none of the NOCEs contain a causal loading amount or percentage. Each of the six contractual documents contains simply a flat hourly rate, so whilst it might be contended that the fact that he was a casual gives rise to there being potentially somewhere in there a casual loading of some description, the contractual documents, in respect of what he was actually paid, do not assist in that regard. So we say that really the argument falls over at that first hurdle, because whatever his causal loading was is unable to be determined.

EDELMAN J: What about Schedule 2?

MR MURDOCH: I am coming to Schedule 2, and can I say at the outset – sorry, I will come to it in a moment. The appellant relies upon Justice White’s finding that under the first three contracts there was an identifiable casual loading of 25 per cent of the rate of pay for a non‑casual base rate field team member in Mr Rossato’s classification under the enterprise agreement. His Honour dealt with this at paragraphs 689 to 727.

Now, the starting point of his Honour’s analysis which, with respect, we say ultimately was incorrect, is clause 9 of the enterprise agreement, if I could ask your Honours to go to that and that is at – Justice Edelman, I am getting to Schedule 2, I just seek to go through this first. Clause 9 is at page 58. His Honour noted, at paragraph 698, that:

Clause 9.1.1(b) –

of the enterprise agreement –

provided for the rate of pay for flat rate FTMs -

which Mr Rossato was, without distinction as:

between permanent and casual flat rate FTMs.

Of course, that is so because when one goes to 9.1.1, it refers to flat rate FTMs. The flat rate of pay is prescribed in the schedules. Flat rates are paid as “compensation for all work” and then there is a range of matters that are referred to within subparagraph (b) that of course include a reference to:

casual loading (where applicable) –

but do not identify, for the purposes of a flat rate field team member, what, if any, discrete component exists for casual loading. His Honour noted that when one goes to the schedules - and the schedules are at pages 88 to 105, and if your Honours just go by way of example to page 99, that is Schedule 6, which deals with the flat rates from 1 July 2014. Mr Rossato, the agreed fact is that he was a level 3. So when one wants to look at where he would be if he was being paid under the DA, one would go over to page 100.

One can see there that the scheduled list provides for different rates as between casual and permanents. The permanent rates for flat rate team members are provided at the bottom of page 100 and then the casual rates for flat rate field team members are provided for - level 3 are provided in the top lines of page 101.

However, notwithstanding that there are separate rates that are provided for casual as opposed to permanent, when one goes back and considers clause 9.1.1(b), it is to the effect that the flat rates were compensation for all of the identified matters, including:

casual loading (where applicable) –

and so it is not a situation where a casual loading is simply built into the rate. Rather, it is a flat rate that compensates for all of those matters. The other relevant clause in the EA is clause 6.4.5(b), and that is at page 51. It states that:

A person engaged as a flat rate casual . . . will not be paid an additional amount as the casual loading has been incorporated into the flat rate of pay.

So, again, what one sees in respect of the flat rate casual, is not a prescribed amount but, rather, a statement that the casual loading has been incorporated into the flat rate of pay. So, at best, it is in there somewhere but what it is, is not able to be discerned. Then, if one goes to clause 14.9, which is on page 72, the statement that is made there is that:

Flat rate FTMs do not receive any additional payment for overtime loadings, weekend penalty rates –

relevantly:

casual loading . . . as these have been incorporated into the flat rate.

Again, it has been incorporated into the flat rate but no specification or assistance as to what it is or how it may have been incorporated. Therefore, we say, the correct view is that the flat rate under each of the separate contracts here – and, also, the flat rate under the enterprise agreement – is simply a all‑up payment which is indivisible in terms of determining what is the casual loading. At paragraph 702, his Honour Justice White noted that:

The references to the casual loading and other entitlements having been “incorporated” into the flat rate and to that rate being “compensation” for all the identified elements allows the possibility that the flat rate provided for each of the elements, including the casual loading, in some undifferentiated way –

And, we say, that that was, with respect, the correct analysis and that his Honour erred in stating in the next paragraph, 703, that:

such a construction would not be appropriate when the EA is read as a whole –

His Honour, on his preferred construction, relied upon the fact that the schedules – which we have taken you to – provided separate rates for permanent and casual flat rate FTMs with the only apparent reason being to differentiate between the permanent and casual rates because the latter included a casual loading.

Certainly, it is true that there is a differentiation, but the difficulty, we say, with making anything of the differentiation between permanent and casual flat rates in the schedule is that, when one works through and works through taking – going back to where the Court was taken before, going back to page 100 and page 101 – there is a differentiation there but the differentiation is uniform – I beg your pardon – I withdraw that. The differentiation between permanent and casual flat rates is not a uniform one and, more importantly, it is not 25 per cent.

The importance of it not being 25 per cent is that, on Justice White’s reasoning, his Honour considered that the 25 per cent loading that was applied in respect of the base rate employees should be taken to be incorporated into the flat rate. The difficulty with that, though, is that, if one goes to page 88 – and this is the schedule that applies in respect of base rate employees – to mine worker level 3, which is what Mr Rossato was, and one goes to the column for 1 July 2014, one sees that the difference paid between a base rate permanent and a base rate casual is the sum of $6.02, if our arithmetic is correct.

But when one goes across to the equivalent employee, level 3, for the 1 July 2014 flat rates at page 100 and 101 and compares the difference between the flat rate paid to the permanents, looking at the alternating shifts, afternoon and night, for a 45‑hour week, by way of example, $32.03, $36.31, $37.92, and then goes across to see what the difference is for the casuals, afternoon and night, 45‑hour week, $36.71, $40.99, $42.60, so the difference between the rate paid to the permanent flat rate employee under the enterprise agreement and the amount paid to the casual flat rate employee under the agreement is less than the difference paid to the base rate employee.

So what one takes from that is that one cannot extrapolate what the base rate employee difference is, as Justice White did, with respect, to try and discern in any way what the uplift in terms of casual loading is for either a flat rate employee under the enterprise agreement, much less for a flat rate employee such as Mr Rossato who is employed under a contract.

There really is, we say, no discernible pathway through to identify what the casual loading was that was being paid. That is a long way to get back to Justice Edelman’s question, but if one cannot discern what the casual loading is for the relevant employee, then the Schedule 2, which is contained in at least the first three of the NOCEs, does not have any work to do because Schedule 2 – and by way of example, that is page 236 – only can be applied where the casual loading is known:

Where your casual loading is 25%, it is made up of the following components:

. . .

If your casual loading is less than 25% . . . the above breakdown applies to your casual loading ‑

But you cannot apply that unless you know what you are starting with, being what is the casual loading.

Now, we know it cannot be - with respect, we know it cannot be 25 per cent because there is not a 25 per cent difference between the flat rate permanents and the flat rate casuals. We know it cannot be 25 per cent based upon the rate paid to base rate employees, because he never was a base rate employee, and because it is a different difference when one compares base rate to flat rate. So ultimately one is in a situation where, perhaps somewhere in there, there was a consideration of what the uplift for Mr Rossato ought to have been, and that is being generous, we say, on the facts, but it is simply not able to be conclusively determined. What the applicant was ‑ ‑ ‑

EDELMAN J: Whether the assumption be correct or not, why was the assumption not that it was a 25 per cent applied to the base rate? At least, if you look at Schedule 2 on page 88 that is a 25 per cent correspondence.

MR MURDOCH: I will just go to Schedule 2 on page 88. The reason one cannot assume that is because he was never employed as a base rate employee, and if that assumption holds true, one would expect that there would at least be a $6.02 difference between what is paid to the flat rate permanent employee and the flat rate casual employee, but there is not. It is less. So, with respect, whilst that was the approach taken by Justice White, in our respectful submission, it is an unsatisfactory and speculative approach.

In any event that does not assist – even if one did take the Schedule 2 approach and the approach that upon that was based, relying upon the base rate amount, Schedule 2 was only in the first three of the contracts, and it was – “removed” might be the wrong word, but it was not continued in the contracts that went thereafter, and there is nothing, we say, that would give rise to an assumption that it ought to continue to apply, because it was removed.

We would also note that, notwithstanding that Justice White went through that exercise, his Honour ultimately found, which we say is correct in the event that, at paragraph 772, that the casual loading was subsumed into the hourly rate paid, which we say must be the case here in any event, because it is a flat rate payment under a separate contract to the enterprise agreement. So, as I said at the outset, we say that one does not get to set‑off, and one does not get to restitution, because it is not possible to identify the relevant additional payment that needs to be considered for the purposes of either of those arguments.

Can we then move, though, to deal with the set‑off point and the restitution point, and we will do so reasonably briefly, because we have dealt with them quite extensively in the written submissions.

As we understand in respect of set‑off, WorkPac seeks to appropriate the whole of what are described as the contractual overpayment, or at least the amount of the casual loading, to discharge the obligations it had to Mr Rossato on account of leave. Or put another way, it seeks to set off part of what it is paid against that which it would have been required to pay him on account of him being entitled to leave and accrued but untaken leave.

The approach that is sought to be undertaken is consistent with that that began in Ray v Radano, an exercise in determining what is the true balance due to Mr Rossato. That exercise entails giving credit for moneys already paid to the employee that were properly attributable to, and not for extraneous purposes to or outside of the claim to statutory entitlement.

The approach taken in Poletti v Ecob is also relied upon – and the approach there of course was that if 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 entitlements, that contractual agreement prevents the employer afterwards claiming that payments made pursuant to the contractual obligation can be relied upon in satisfaction of award entitlements.

The classic example is that if under a contract there is the provision to pay additional moneys for say a uniform allowance or something of the like, if the employer pays an additional amount for that, but does not pay the award wages, the employer cannot turn around and say, “Well, I paid you some additional moneys for a few uniforms. I want to apply that to what you ought to have been paid under the award”.

So there is a need to characterise the payment that is in question, and the character of the payment needs to be ascertained. The same exercise occurs if it is not contractual, but if it is done by designation. The converse applies, namely that there is a close correlation between the contractually agreed purpose or the designation and the obligation or liability to be discharged. The contractually agreed payment or designated payment can be relied upon to satisfy the obligation or liability.

We say that the requisite close correlation between the contractually agreed purpose or subject matter of the payment, or here the payment to compensate for not having an entitlement, and the NES obligation does not exist. That is because the casual loading, if it can be identified, or any part thereof, was not a money entitlement that was provided to Mr Rossato in respect of untaken annual or personal leave, because it was paid on the basis that he had no entitlement to annual leave or personal leave.

Or put another way, the loading, if it can be ascertained, was not paid to satisfy any entitlement to annual leave or personal leave, because those matters were not even in contemplation of the parties to the contract – because the contract was on the basis that he was a casual.

So, we say that the subject matter of the contract in terms of casual loading is just fundamentally different and to a different end because it was not being paid in terms of an entitlement for or towards paid leave, but it was being paid because expressly, if he was a casual, he would not be able to take leave. The payments are simply paid to different ends in respect of different issues and the requisite close correlation that needs to be demonstrated, we say, did not exist.

In terms of the failure of consideration argument that is brought against us, the appellant asserts a total failure of a distinct and severable part of the consideration on the basis that Mr Rossato was paid to procure his services as a casual field team member. It has been determined that he was not a casual field team member and ought to be refunded the casual loading. Again, putting aside that we say the casual loading cannot be identified, the difficulty, we say, with respect to the argument that is being made in this respect by the appellant is that this was not a situation where there was a total failure of consideration because it was not a situation where the payment that was made was made for a purpose which has failed, “or a contemplated state of affairs has disappeared”, to pick up the language used in the Roxborough Case.

That is because – and this, of course, cannot be undone – Mr Rossato proceeded to work as if he was a casual. He has provided the service for which he was paid under the contract. There has not been a total failure of several parts of the consideration. The purpose loosely nominated in the NOCE was to procure Mr Rossato’s services as a casual field team member, notwithstanding that he was not in truth a casual employee, he worked as if he was and WorkPac obtained a benefit of him so working. Therefore, the consideration has not wholly failed, and the position of the parties cannot be restored.

In terms of the facts that we rely upon to establish that argument, we have set them out at paragraph [38] of the written submissions. The point was comprehensively considered by Justice Wheelahan at paragraphs 978 to 981. We adopt the consideration and rationale expressed by his Honour in those paragraphs.

EDELMAN J: Your assumption, in this submission, is that the basis that fails has to be the performance rather than the rights that are conferred. In other words, you cannot have a failure of basis for the rights that you have conferred upon another party.

MR MURDOCH: That is right, because he has done the work, and what he has given up, as it were, by doing the work and working as a casual, that cannot be given back to him now. He has performed the contract.

The next point that we wanted to deal with is the – or to note, at least – is the unlawful and unenforceability point that we raise and we say that this is a further barrier to the appellant obtaining set‑off or restitution. We based this on the fact that under section 92 of the Fair Work Act, it is unlawful to cash out or, to put it another way, prepay annual leave. Similarly, it is unlawful to cash out or, put another way, prepay personal or carer’s leave.

KIEFEL CJ: The qualification is accepted in accordance with the cashing out terms of the enterprise agreement. Are there such cashing out terms?

MR MURDOCH: I would need to check if there are cashing out terms in the enterprise agreement. But, moreover, there is no suggestion that any such arrangement was in place in this case. So, we say, that once it is accepted that one cannot prepay or cash out for leave, if the payments that WorkPac had made were now able to be brought into account to set‑off or, by way of restitution, the effect of that would be to recognise prepayments for leave, either personal leave or annual leave which, under the statute, were proscribed.

So, that is a further basis which we rely upon to say that neither the set‑off principles or the restitution principles can be relied upon by the appellant because it would be, in effect, allowing the appellant to bring into account moneys that it was not lawfully able to pay by way of prepayment.

Can we then, just very briefly, deal with the section 545 point. Just bear with me, your Honours, whilst I go to the section. The primary difficulty in respect of the section 545 point, we say, is that section 545 simply is not live in this proceeding, because the proceeding was brought below as an application for declarations on the part of the appellant. There was no declaration sought in respect of the operation or impact of section 545(2) in this case, and remembering, of course, that the matter below proceeded by way of an agreed statement of facts. It is simply, we would say, too late in the day to now seek to rely upon a provision that, it would seem, provides at some level a discretion. It refers to:

the Federal Court or the Federal Circuit Court may make –

and then, in subparagraph (2)(b) refers to:

an order awarding compensation –

which again would require an analysis of, on the facts of a particular case, what the compensation ought to be. We say that not having invoked, and of course, not being able to invoke, because it was a declaration that they sought, section 545 below, it really does not – it is not engaged and cannot be taken anywhere.

KIEFEL CJ: But the orders went a bit beyond the declarations that were originally sought, did they not? The orders included orders as to your client’s entitlement to certain leave.

MR MURDOCH: They were dispositive orders, but there was no – section 545 was not utilised.

KIEFEL CJ: But what I am saying is the orders might not be the end of the matter, if they are also a basis for saying that he has already received moneys on account of those matters. It is possible that the matter could be remitted for a quantification of the true loss. That would not be inconsistent with the way in which the parties have conducted the proceedings.

MR MURDOCH: Well, the difficulty with that is, we would say, that Mr Rossato has not made - section 545 deals with the orders that can be made to dispose of a claim brought. Mr Rossato has brought no claim.

KIEFEL CJ: Not formally. The question is whether or not the parties have conducted the proceedings by way of what is really a claim, and all that is missing is the document.

MR MURDOCH: Well, in any event, if I am understanding, respectfully, what your Honour is saying, this Court cannot be asked to deal with section ‑ ‑ ‑

KIEFEL CJ: No, it would have to be remitted. Remitted with conclusions as to law upon which the loss was then calculated.

MR MURDOCH: The only point that I would make further in respect of that is, and I do not think there is any dispute at the Bar table in respect of this, there is no present dispute between my client and WorkPac as to what, if the appellant is unsuccessful, Mr Rossato is due.

KIEFEL CJ: I do not think you could say that in face of the claims for set‑off. I think the dollar figure is very much in dispute.

MR MURDOCH: I accept that.

GAGELER J: In paragraph 276 of Justice White’s judgment.

MR MURDOCH: Yes, your Honour.

GAGELER J: At (iv) there is a recording an agreement which uses the expression or the word ‘entitled’. What does that mean?

MR MURDOCH: Paragraph 276, your Honour?

GAGELER J: Paragraph 276(v).

MR MURDOCH: Yes.

GAGELER J: Second sentence:

WorkPac has agreed that, if Mr Rossato is found to be entitled to any of the amounts he has claimed, it will, subject to the resolution of its claim to a set off, pay him those amounts –

What does that have to say about any claim that might be made under section 545? It is a very obscure agreement, at least as recorded.

MR MURDOCH: Yes. What that, in effect, means is that there will be no requirement on Mr Rossato to commence a proceeding to obtain the amounts. What is outstanding will be paid to him.

GAGELER J: But does that anticipate what would happen if he did make a claim under 545? The reference to “entitlement”, I just do not quite understand it.

MR MURDOCH: Well, it may anticipate that in the very broadest way, but ‑ ‑ ‑

GAGELER J: It is a matter of agreement. I am just trying to understand what the agreement is.

MR MURDOCH: I cannot take that any further than what is there. I come back to the point, though, that if there was to be a full debate as to what ought to arise under section 545, it would need to be a debate that went to how, in what circumstances and on what basis the discretion by virtue of “may” ought to be exercised. Then there is a question of compensation and those matters are not before this Court.

We would otherwise rely upon the written submissions and that particularly includes what we have said in respect of the impact of the regulation, but we do not wish to add to the written submissions orally in respect of that. They are our submissions, may it please the Court.

KIEFEL CJ: Yes, thank you, Mr Murdoch. Yes, Mr Crawshaw. It goes without saying, Mr Crawshaw, that the Court would not be assisted by any repetition of what has already been argued at length.

MR CRAWSHAW: Yes, I understand. In taking that on board, I will move fairly quickly to paragraph 7 of our outline. Can I preface going to that paragraph that, as a result of the primary judgment, the finding of the first respondent had the requisite firm commitment in advance. It was justified in two ways.

The first is that primary dealt with in the primary judgment of Justice White, which my learned friend Mr Murdoch has dealt with and which is dealt with in our first six propositions, essentially. The second way in which the finding was justified is to primarily look at what arose from the statute and that is principally dealt with in the judgment of Justice Bromberg.

A good starting point ‑ and I will go to that, which is the characterisation test, so‑called – but a good starting point for the way to view the firm commitment in advance in both cases – or in both bases – is what was said at paragraph 444 in Justice White’s judgment, which your Honour Justice Gordon asked my learned friend, Mr Walker, about yesterday, and which the principles or propositions in there Mr Walker accepted, except for a caveat about subparagraph (h). At this point in time, we just want to stress subparagraph (f) and that is:

the postulated firm advance commitment does not have to be express but may be discerned from the employment arrangement considered ‑

And there is reference made to the High Court case in Doyle as well as the case of MacMahon decided 10 years ago, which was similar to the findings in Skene and Rossato. Now, while it says that principle is particularly so when the employment contract is informal, that principle still applies when there are written documents.

KIEFEL CJ: The High Court cases to which you refer, are they concerned with informal contracts?

MR CRAWSHAW: The only one I refer to is Doyle.

KIEFEL CJ: Doyle, yes.

MR CRAWSHAW: I think it was probably primarily informal. I will have to go back. I will check that at lunch time.

None of those principles say it must be a contractual promise. I think this is something that the fourth respondent says in their outline, it does not apply to fixed‑term contracts. So, the sort of examples that were in paragraphs 174 and 175 relating to the relief teachers and relief university academics, where there was a 12‑month contract in one case, two months in another, or repeated two months contracts, they were fixed‑term contracts.

No one would argue that a fixed‑term contract qualifies for the notion of a commitment in advance to indefinite work because there the commitments are only for a fixed term. So, you can exclude those sorts of cases, as the Full Court did in Skene. I suppose a maximum‑term contract would be the same. There is a maximum, it could not be indefinite.

The point is there was no limit on the duration in any of the contracts in Rossato – they were also indefinite. There was a term specified, but it was said that that was a guide only. Those words actually assist the first respondent, rather than ‑ ‑ ‑

KIEFEL CJ: Mr Crawshaw, you are, although named as a party because of the processes which were taken in the Federal Court, your position is really more akin to an intervener which means that you do not really argue the case for Mr Rossato. That has already been done. The interests that you are seeking to protect are best dealt with by points of principle.

MR CRAWSHAW: Thank you, your Honour. I will move on to points of principle relating to the alternative characterisation test that we commenced to deal with in proposition 7 of our outline of oral argument.

KIEFEL CJ: Is there anything you seek to add to what Mr Murdoch has said? In this regard I see that paragraphs 7 to 10 really take up much of what he has covered.

MR CRAWSHAW: We actually do want to go to the English Uber Case, and we do want to go to the Foster Case, and we do want to go to Hollis v Vabu.

KIEFEL CJ: Very well. The Uber Case involved a question of the distinction between an employee and an independent contractor.

MR CRAWSHAW: They all do.

KIEFEL CJ: Well, how is that helpful here?

MR CRAWSHAW: Because we say there is no reason at all in construing the NES entitlements under the Fair Work Act which apply to employees, to apply a different test in determining whether the workers are employees, as distinct from independent contractors, to the question of exclusion of certain types of employees, namely casual employees, as distinct from permanent employees. It is the same legislation, and in our submission it would be incongruous not to apply the same characterisation approach.

EDELMAN J: So are casual employees an independent contractor?

MR CRAWSHAW: I am sorry, your Honour?

EDELMAN J: A casual employee, then, is treated as an independent contractor for the application of the test?

MR CRAWSHAW: No, your Honour, I am not suggesting that at all. I am suggesting that when you are determining under those standards in the Fair Work Act whether the standards apply, it is a question of whether the description of “employee” is met, to decide whether the description of the “employee” is met, as distinct from the worker being an independent contractor. You, in accordance with decisions of this Court, apply the characterisation test.

STEWARD J: But is it not the case with the independent contractors and employers that one looks at a broader test because part of the test includes matters that would not be included in a contract? So, for example, the contract might be silent about control, so you look to see what level of control there is. Here the test is, as I understand it, is there the presence of some form of firm commitment going forward for indefinite employment? Why would one not look outside the contract to see the answer to that question?

MR CRAWSHAW: Well, we would submit it is an analogous process.

STEWARD J: But you either have the commitment or you do not. I assume it is an enforceable commitment.

MR CRAWSHAW: No, we say – the commitment that has been ‑ and this is in accordance with paragraph 444, which is why I went first ‑ we are not talking about a contractual promise, we are talking about a concept that captures the essence of the casual relationship, and that is what the courts have said at the time, that the notion of whether there is a firm advance commitment captures the essence of whether you are a casual or permanent employee.

In a similar manner, when you are looking at the question of whether you are an employee or an independent contractor, the courts have also sought to latch onto something that captures the essence of that, and your Honour mentioned the notion of the control test. That is something that not in itself is necessarily part of the contract, but something that captures the essence of what is already in the, I will use the word “contract”, but perhaps, given my submissions, I should be talking about the relationship, something that captures the essence ‑ ‑ ‑

STEWARD J: So does that mean that if a contract does not promise a firm commitment, then, in a case where you would say, nonetheless there is a firm commitment, the parties have acted in disconformity with the contract? Must that follow?

MR CRAWSHAW: If the contract ‑ well, especially the express contractual terms, purport to label the employee as a casual, or even to the extent that the express contractual terms provide for what a normal incidence of a casual employment relationship ‑ ‑ ‑

STEWARD J: Just take clause 5.5 here, in the conditions, where WorkPac says, I do not promise to give you any assignments.

MR CRAWSHAW: Yes, yes.

STEWARD J: So are we to take it that the parties have acted not in conformity with that promise?

MR CRAWSHAW: I am saying, in that situation, if the Court finds that the essence of the real relationship is a firm commitment in advance, it must follow that there is a disconformity. And that is no different than the contractor‑employee situation, where labels are given to, for example, to a worker that label them an independent contractor in some way. I think the Foster Case 70 years ago went even further and the Court there said that they were not going to be bound by such labels or such provisions.

To come back to your Honour Justice Steward’s original question, we would see them as analogous exercises. The control test, of course, is as capturing the essence of the independent contractor/employee relationship has fallen into disuse and now there are other essences – if I can use that terminology – arising and I think probably the Court is about to deal with that question in the independent contractor cases coming before you.

For example, the notion of whether the worker is in business for himself or herself. Once again, that notion, if it be a correct capturing of the essence of that relationship, is something that is not part of the contractual promise but captures the essence. That is why we say there are analogous processes.

Also, Justice Bromberg’s judgment, as I said, is the key to our submissions on these matters. Perhaps I should go there first before trying to ask your Honours to go any further to the independent contractor cases. Can I first take you to paragraphs 54 to 56 and ask you to look at them. Towards the end of his judgment on these matters at paragraphs 211 and 212, they really summarise the position that Justice Bromberg takes, namely the characterisation test. There are two aspects to the characterisation test that really arise. The characterisation test could be applied at the time the relationship is entered into or it could be applied at the time the entitlements under the Fair Work Act and particularly NES in this case arise.

Justice Bromberg’s view is that the entitlements arise - sorry, the characterisation test can be applied at the time the entitlements arise, which, by necessity, also allows post‑contractual conduct to be taken into account. The other aspect, coming back to the discussion yesterday as to whether expectation would be sufficient, you will see at 212 that the judgment of Justice Bromberg is that:

A mere subjective expectation . . . would not be sufficient, but an objectively justified expectation of that kind would –

be sufficient.

KEANE J: Yet, Mr Walker took us yesterday to cases - to examples from the Act where an employee could be a casual employee notwithstanding the existence of an expectation that fell short of the firm commitment.

MR CRAWSHAW: I think that, with respect, the examples are where a casual employee may have certain rights, this is outside the NES area, if there was a reasonable expectation of regular employment or something of that nature, regular continuous employment. But that, I think, as my learned friend Mr Murdoch said, is a retrospective test. When those sections are applied you look back ‑ ‑ ‑

KEANE J: There is no test more retrospective than the one that Justice Bromberg is proposing.

MR CRAWSHAW: No.

KEANE J: That is the most retrospective of all tests.

MR CRAWSHAW: The firm advance commitment, in advance, is by necessity a prospective test. Justice Bromberg only goes to the time when you apply that prospective test.

KEANE J: But he says you look at the time when the entitlement is said to have arisen.

MR CRAWSHAW: Yes. If you are entitled to do that and that ‑ ‑ ‑

KEANE J: If you are entitled to leave – if you have leave entitlement. So, you would look at that and after - at a point where there has been 12 months of interaction. Is that what you do?

MR CRAWSHAW: Yes. But you still apply a prospective test.

KEANE J: You are not looking back to the 12 months during which the entitlement is said to have accrued?

MR CRAWSHAW: They are just informing how you apply the prospective test. The prospective test – when I say “test”, it is the essence of the relationship – is determining, at that time, whether there is the requisite firm commitment in advance. That, by necessity, has to be prospective, whereas the test that your Honour put to me – and my learned friend referred to – this is dealt with in the Full Court – are tests that apply if a person is already a casual, by any test, and when you look back and see, despite being a casual, if they have had regular and continuous employment or something of that – it might not be the exact phrase – they are then, as a result of that retrospective assessment, entitled to – it arises particularly in unfair dismissal situations.

As a result, at the point of dismissal, applying that retrospective test – despite what they may have – the fact that they may been a casual – if you look back retrospectively and those characteristics have, in retrospect, transpired, they are then entitled to exercise the right of unfair dismissal.

I also note that Justice White agreed with the characterisation test in the alternative. That can be found at paragraphs 622 to 631. His disagreement with Justice Bromberg was as to the timing of the assessment of the characterisation process. He said, relying on Connelly v Wells, that it had to be at the time the relationship was entered into.

I have given the references to Uber. Can I just say that those paragraphs stand for these propositions. In short, the primary – this is at paragraph 69 – in short, the primary question was one of statutory interpretation, not contractual interpretation. In that sense, Uber is on all‑fours with Justice Bromberg’s judgment, at paragraphs 52 to 54 – I think I might have said 54 to 56 before.

At 85 there is no legal presumption that a contractual document contains the whole of the parties’ agreement and no absolute rule that terms set out in a contractual document represent the parties’ true agreement just because an individual had signed it.

If I can next move to the issue of post‑contractual conduct because the way the appellant puts its case is that it is absolutely prohibitive in relation to these sorts of relationships. Once again, when you come back to the independent contractor versus employee cases, we say that that is not a correct analysis of the cases. To do that I do have to take you to Hollis v Vabu and Foster. Hollis v Vabu is in the joint book of authorities at tab 33.

KIEFEL CJ: That might be a convenient time for the Court to break for luncheon, Mr Crawshaw. The Court will adjourn until 2.15.

AT 12.41 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.13 PM:

KIEFEL CJ: Yes, Mr Crawshaw.

MR CRAWSHAW: Thanks, your Honour. I was about to take the Court to Hollis v Vabu, which is in volume 3, tab 33. Of course, this was a vicarious liability case, where the same characterisation test applies, and it was an independent contractor/employee case, of course. The paragraph about which a dispute arises or seems to have arisen is paragraph 24 and in particular ‑ that is at page 653 of the joint book of authorities ‑ and in particular the second last sentence:

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.

And then there is references to the work practices. And the question arises in terms of post‑contractual conduct, as to whether work practices includes post‑contractual conduct. Certainly, this case does not expressly state that post‑contractual conduct should be taken into account, or can be taken into account but, in our submission, that is plainly what occurred in this case. You only have to look higher up in paragraph 24 to see that:

Vabu’s fleet administrator gave evidence that no payments of annual leave . . . were given, and no superannuation deductions were made –

Further on in the judgment, somewhat similar to this case, there was reference – paragraph 49 – to work rosters, and in paragraph 54 to pay summaries and the like, whereas in this case there were time sheets.

R v Foster, I suppose, is in a similar position, although we would have thought much clearer in this regard. It is in volume 3, page 770 of the joint book of authorities. If you go to page 783, point 4, you will see at line 25 ‑ ‑ ‑

KIEFEL CJ: What page on the reports, Mr Crawshaw?

MR CRAWSHAW: Page 151 of the report, page 783 of the joint book of authorities, line 25:

For, if in practice the company assumes the detailed direction and control of the agents –

et cetera, we would say in practice there clearly it is talking about post‑contractual conduct. This of course is an employment case about whether a dispute was created for the purposes of the old industrial relations system, which depended on disputes. There was an argument about whether the workers in question, life assurance agents were employees or contractors.

If you go back to page 150 of the report, the last paragraph, and read through to the paragraph I have just taken you to, you will see that it was a situation where the employees had, in effect, been described as “independent contractors”. The agreement stated so. At line 20, on page 151, the Court said:

Provisions of this character are perhaps more likely to arouse misgivings as to what the practical situation of the agent may be in fact than to prevent a relation of master and servant being formed.

We would make the similar comment, by the way, in relation to the later ‑ ‑ ‑

KEANE J: But is not what is being said in the following paragraph reflective of a variation of the contractual arrangement in the document:

For, if in practice the company assumes the detailed direction and control of the agents in the daily performance of their work and the agents tacitly accept a position of subordination to authority and to orders and instructions as to the manner in which they carry out their duties –

Is that not saying that the parties have, by their conduct, agreed to a relationship of subordination in relation to the manner in which work is to be done – accept a position of subordination?

MR CRAWSHAW: Yes, the Court is clearly saying that the parties have done that, but the words in practice are the key, we would submit, to the fact that the Court is looking at what happened after the relationship was entered into, rather than just looking at the contractual documents which are set out earlier on and which I have just taken you to.

KEANE J: What they are saying is that the real contract between the parties is not contained entirely in the document.

MR CRAWSHAW: I agree with that, your Honour.

KEANE J: But they are talking about the real contract, they are not talking about something that is ‑ ‑ ‑

MR CRAWSHAW: I see what your Honour is saying.

KEANE J: ‑ ‑ ‑ not recognisable as a contract, or a contractual variation.

MR CRAWSHAW: I would not read it as talking about a variation in the absence of a variation being mentioned ‑ ‑ ‑

KEANE J: Well, they use the words “accept a position of subordination” in relation to the performance of their duties. It has quite a bit of a contractual sound to it, does it not?

MR CRAWSHAW: Well, so does anything that occurs in the characterisation of the relationship. It can be contractual, or it can arise from conduct. But the point of the argument is – and the well‑accepted test in independent contractor‑employee cases is that you can rely on both. They can go to similar subject matters.

STEWARD J: Can I ask, which is the authority that says that a non‑binding commitment is sufficient? Is there a case that says that a non‑binding commitment is sufficient?

MR CRAWSHAW: Are you talking about the sort of authorities that were discussed at paragraph 444, that I took you to?

STEWARD J: I think, apart from MacMahon, they are all independent contractor cases. I am just talking specifically for the definition of who was a casual employee. Is there an authority that says a non‑binding and firm advance commitment is sufficient?

MR CRAWSHAW: When your Honour says “non‑binding”, the very – I will go back to what I said earlier, the commitment has never been characterised as a binding contractual matter or binding in any way. It is what is the essence of the relationship after considering what might be binding contractual provisions and might be, on the characterisation argument, other matters.

STEWARD J: Other than Skene, and perhaps MacMahon, are there any authorities in the casual employment area that stand for that proposition?

MR CRAWSHAW: Well, it started with Hamzy. There is no dispute - as is apparent from my learned friend’s acceptance of paragraph 444, there is no dispute about these principles, and there is no dispute ‑ ‑ ‑

EDELMAN J: Although Mr Walker accepted paragraph 444 in the context of saying that, provided that subsequent conduct amounts to a variation of the contract ‑ ‑ ‑

MR CRAWSHAW: Yes, I understand that.

EDELMAN J: Yes.

MR CRAWSHAW: I think I said that earlier. The case was run on the basis that the test was whether the relationship, however you got there, there was an argument about how you would get there. But the case was run on the basis that the test was whether that character could be – required commitment could be given to the relationship. That was common ground.

In fact, it comes back to a matter that I meant to – I was going to just raise in answer to I think it was Justice Gordon asked about what Chief Justice Allsop meant by the obiter in the interlocutory decision. In the Skene litigation, Mr Walker’s client had accepted that the requisite commitment had been present and as a result of that Mr Walker’s client said we are not in a position to seek special leave to the High Court in relation to the Skene Case, because we gave the requisite commitment and we are coming along in this new litigation, and we are not going to concede the requisite commitment. But the case was run before the Full Court in these proceedings on the basis that – whether that requisite commitment could be discerned from the relationship was the prime question.

While I am just tidying up on matters that were raised before lunch, just one other thing. In relation to the question your Honour Justice Keane asked me about in relation to other provisions of the Act, I said it was dealt with somewhere in the judgment – it is paragraphs 492 to 496. That is all I wanted to say on the characterisation.

The only other matters I wanted to address were two matters that were in the appellant’s reply submission at paragraph [15]. Firstly, the appellant argued at paragraph [15] that the prohibition on cashing out leave does not apply in the context of set‑off, because it is only a prohibition on paid annual leave, whereas the entitlement claimed is unpaid leave at the point of termination.

This ignores the fact the appellant is attempting to set off payments made before termination on the basis that they were payments made in lieu of being entitled to take annual leave and only goes to demonstrate the absence of any correlation between an entitlement to be paid on termination and an identifiable part of regular payments made before termination. We would say the payment of unused annual leave on termination is akin to the redundancy payments and notice of termination, which were discussed yesterday.

By way of reference to the Minister’s criteria, this is not just a matter of timing, the difference between the payments during the term of the contract and payments made on termination; it is a matter of the character of the payments.

The other matter in paragraph [15] that we wanted to address is the argument that relies on a casual provision for restitution or set‑off is consistent with the Fair Work Act because that legislation does not replicate section 173 of the predecessor legislation, which expressly provided that a term of a workplace agreement or contract has no effect to the extent that it purported to exclude what was called the Australian Fair Pay and Conditions Standard, which is the equivalent to what is now the National Employment Standards.

By reference to the decision in Equuscorp, which came up with three categories of statutory illegality, we would accept that there is no express illegality or unlawfulness in the current Act, but we would submit that the other two categories – this is paragraph 23 of Equuscorp – there were two other categories - implied prohibition and unenforceable because it is associated with an unlawful purpose.

We say they are present in this case and we rely on the explanatory memorandum, which is set out in the joint book of authorities but it is also in our written outline at paragraph 59, saying it is not necessary to have the express prohibition for unlawfulness to, in effect, arise. If the Court pleases, they are our submissions.

KIEFEL CJ: Thank you, Mr Crawshaw. Yes, Ms Hanscombe.

MS HANSCOMBE: Thank you, your Honours, I am sorry to hold you up.

KIEFEL CJ: That is all right, Ms Hanscombe. You have heard what I said to Mr Crawshaw at the outset, so I imagine that there is not much that you need trouble us with ‑ ‑ ‑

MS HANSCOMBE: I did.

KIEFEL CJ: ‑ ‑ ‑ that has not already been covered.

MS HANSCOMBE: Well, in a sense that is so, and in a sense it is not, if I may say so. What has been left out is the real‑world context. There has been a great deal of debate and questioning as to where the commitment might arise from. Can I take you back, if I might, to Hamzy. Hamzy is ‑ I am not sure what the tab is, it is page 1626.

EDELMAN J: Tab 54.

MS HANSCOMBE: Excuse me a moment, it is tab 54. Hamzy was a case that concerned a person who worked at KFC, the terms of his contract were not before the Court, apparently, there is no reference. There is a short summary to some facts in paragraph 7. The question was whether his employment was casual. The formula, that seems to have assumed a life of its own and galloped away, was whether there was firm advance commitment. But at paragraph 37, we see how this idea develops. The Full Court went back to the case of Reed, that was a case before Justice Moore, and it concerned the validity of the regulation. At paragraph 37, the Full Court says:

In Reed there was no challenge to the validity of the regulation. Moore J was concerned only to review a decision –

Et cetera. Halfway through that paragraph:

He stated (at 424) that, in Australian domestic law, the expressions “casual employee” and “casual employment” have no fixed meanings. He thought it would be wrong in principle to treat as conclusive, for the purpose of reg 30B, the character ascribed by the relevant award to particular employment. Moore J construed the words in the Convention, “workers engaged on a casual basis for a short period” as referring to a situation “where the employment is known to the parties –

his emphasis:

at the time of engagement to be informal, irregular and uncertain and not likely to continue for any length of time” (emphasis added) However his Honour thought reg 30B(3) required attention to the situation at the time of termination –

And here is the, we say, essential concept:

the employee must have had a reasonable expectation of continuing employment at the time of termination.

The “reasonable expectation”, that is the lynchpin concept. It is an objective concept, it is not necessarily a contractual concept, and nor need it be.

KIEFEL CJ: That is the question though, is it not? How does this operate in the context of a relationship that is established by contract between the parties?

MS HANSCOMBE: We would say, your Honour, that that begs the question to a degree. The relationship is the child of the contract. But it is not co‑extensive with the contract. The contract has a label attached to it – offer of casual employment.

KIEFEL CJ: No, it has terms. It has promises. It has obligations.

MS HANSCOMBE: It does, yes, it does.

KIEFEL CJ: That is what gives the answer to the relationship.

MS HANSCOMBE: That is why I began by saying can I take you back to the real world? Mr Rossato – like my client ‑ ‑ ‑

KIEFEL CJ: This is a non‑contractual real world, is it?

MS HANSCOMBE: This is the real world. Glencore need their coal mined. Mr Rossato is a man towards the end of his working life with a sick partner who cannot work. He needs work. He is a qualified person.

KIEFEL CJ: I think you might have heard me say to Mr Crawshaw, you are not appearing for Mr Rossato.

MS HANSCOMBE: No, that is so, your Honour. But, Mr Petersen is in exactly the same situation with the same suite of contracts.

KIEFEL CJ: You are representing his interests and, in that regard, as an intervener, you can raise points of principle in protection of those interests, but we are not going over the facts of either case in your address.

MS HANSCOMBE: If your Honour please. I will do my very best to talk about the real world without the facts. But the reasonable expectation that this work would be regular and ongoing arises from the nature of the work and the contractual arrangements. For example, if you sign one of these notices of casual employment, you accept that offer. You bind yourself by the general conditions not to take any other work for any other employer. That is part of the contractual framework in which the real-world work must operate. You bind yourself to work on the rosters. You bind yourself to be performance assessed – all of this is from the general conditions – after the expiry of a six‑month qualifying period.

We know from the statement of agreed facts that that did occur in this case but, unfortunately, has been lost. We can find one – and I do not know if this will trespass on your Honour’s observation – and I apologise if it does – but we can find one performance review of Mr Rossato in the material which shows ‑ ‑ ‑

KIEFEL CJ: Are the terms and conditions of your client’s employment the same as those contained in the notice of offers here and the general conditions?

MS HANSCOMBE: So far as I can ascertain. The general conditions are certainly the same. The enterprise agreement is certainly the same. Both the terms and conditions – I am sorry, I withdraw that. The general conditions and the enterprise agreement provide for this six‑month qualifying period and for performance review at the end of the qualifying period. We can see from the one performance review that does exist in the material, that attendance is a relevant matter which is assessed – attendance at the site on a regular basis. Can I take your Honour to that performance review? It will be Mr Rossato’s, but you have not been taken to it.

KIEFEL CJ: I am sorry, I did not hear that.

MS HANSCOMBE: It will be Mr Rossato’s but you have not been taken to it by any other counsel. It does show that attendance is a relevant matter, which is assessed ‑ ‑ ‑

KIEFEL CJ: But this is a provision which arises in your client’s general conditions as well, or only in Mr Rossato’s?

MS HANSCOMBE: Yes, that is so. He has to be performance assessed, at the end of his six‑month qualifying period and it would appear during other times in the employment. But I cannot tell you from here the facts of Mr Petersen’s performance assessments because I do not have them at my fingertips.

KIEFEL CJ: They would not be relevant to this anyway.

MS HANSCOMBE: They would not, no. The central point is that Mr Petersen and the 11,000 group members worked on the same system of work, with the same suite of documents, controlling that system.

KIEFEL CJ: But with different notices of offers. We are hearing – you are focusing on the general conditions and the enterprise agreement, are you?

MS HANSCOMBE: The notices do not change much, as you have seen, for some months. Some of the group members will have had notices of the first sort we have seen, some will have had notices of the second, some like Mr Rossato will have had notices of both forms. Those suites of documents cover the span of the employment of the group members. I should say to your Honours that the group membership is defined to be people who work for WorkPac ostensibly as casuals for six months or more, so there are no people represented in the group who work for less than six months.

KIEFEL CJ: It is just that if you cannot draw some kind of parallel or analogy with the contractual provisions in your client’s case with those with which we are concerned here, I am not sure that there is much that you can say which is of assistance to this Court, or as protective of your client’s interest. There has to be that close connection, as has been ‑ ‑ ‑

MS HANSCOMBE: I accept that, and I am clearly putting this very badly. Can I have another try? I took you to Hamzy because Hamzy is the origin of the phrase “a firm advance commitment”.

KIEFEL CJ: Yes, I think we appreciate that.

MS HANSCOMBE: Hamzy was not setting down a formula. The Full Court in Hamzy was trying to give some intuitive content to the notion of on‑demand work. This Court, since Doyle – which is more than 70 years ago – has routinely examined the nature of employment relationships in order to determine, I agree, whether contractor or employment, or in the case of Doyle, whether casual or not. The quality of the relationship is the central issue ‑ ‑ ‑

KIEFEL CJ: But these are in cases which are not controlled by contracts. The question is how do you translate them to a situation where there are promises and obligations – promises made and obligations taken?

MS HANSCOMBE: I think you translate that, I would answer at least in part, by coming back to a question Justice Keane asked, which arose from the discussion with Mr Crawshaw of Foster’s Case. I do not have your Honour’s question verbatim, but it was to the effect, I think, should we understand what happened in Foster’s Case to have been a contractual variation? We would say whether it is a contractual variation or it is not, in Foster’s Case or in this case, is really not a relevant question because the question is what is the nature of the relationship?

KIEFEL CJ: Yes, but the question there is why? Why is that the principal question, when you have contracts controlling it? That is, I think, the area that you might assist us with.

MS HANSCOMBE: Because the Fair Work Act says that these exclusions from the minimum standards are exclusions for employment other than casual employment and that requires that the Court identify the nature of the employment. The employment is not the contract – it is the relationship that is begun by the contract.

KIEFEL CJ: Or the relationship is formed by the contract. That is, I think, more conventional contractual theory.

MR HANSCOMBE: Well, it might be initiated by the contract. But as we said, for example, in Foster’s Case, what this Court held then ‑ ‑ ‑

KIEFEL CJ: But that was a case of a contractual variation, as Justice Keane pointed out. It was not that you just put the contract to one side and have a look at what the relationship between the parties is – which might be interesting if there is not any contract, or there is a suggestion that the contract has been so departed from that it no longer answers the question of what the relationship is. But neither of those situations arise here.

MS HANSCOMBE: The question in those terms would be, what are the shared expectations of the people – objective expectations - entering this contract when they enter it?

KIEFEL CJ: Why would not the answer to that be that each party perform their part of the bargain according to the contract?

MS HANSCOMBE: The answer there at least, in part, is because of what the Supreme Court of the United Kingdom has held in Uber.

KIEFEL CJ: That is a case involving a question of employees and independent contractor.

MS HANSCOMBE: Yes, it is. Yes, I accept that.

KIEFEL CJ: So you have to analogise again.

MS HANSCOMBE: I do have to, that is so. But that is the authorities that we have.

KIEFEL CJ: Yes.

MS HANSCOMBE: The Supreme Court pointed out there that you had, on the one hand, a party with a very great degree of bargaining power to formulate the contract. On the other hand, you have an individual worker. In the case of Mr Petersen, you have an individual coalminer. Can it really be said that the contract drafted by the present appellant is open, in any realistic sense, to negotiation as to particular words, on the part of Mr Petersen?

KIEFEL CJ: Mr Murdoch has argued this for his client and it is not suggested that the contract is a sham or that it does not reflect the bargain reached between the parties. You are not in a position to vary that position on behalf of his client.

MS HANSCOMBE: I accept that, but I am in a position, I would submit, to point back to this Court’s judgment 70 years ago in Foster where the Court said, a little further down the page than Mr Crawshaw took you – this is at page 151, about point 7 on the page:

The case for the respondent union simply is that it does not represent the reality of the relation in practice of the agents and the prosecutor company.

That is what I am trying to put to you. The reality of the relation is that these parties had a shared expectation that the coal would go on being mined and that the workers would go on mining it on a regular basis, on a roster, because, inter alia, they were not permitted to work for anybody else.

GAGELER J: Is one way of putting your interpretation of Hamzy to say that we are looking for an objective mutual expectation as to how the contract will be administered.

MS HANSCOMBE: Exactly so; how it would be not only administered but performed by the worker, exactly so. That is why I began by saying this is about Glencore getting its coal mined and it is about Mr Petersen having an ongoing expectation that he would work on the regular roster.

GAGELER J: So without amending the contract, the expectation could not be inconsistent with any term of the contract, could it?

MS HANSCOMBE: That is probably so, but we would say it is not inconsistent because the contract says, “You will work the rosters, you are directed to work”.

GAGELER J: Yes. I understand.

MS HANSCOMBE: And as for the duration of the contract, we saw on the first NOCE, we have six months, this is a guide only. That turned out to be right because it lasted for 10 months. As long as there is no frank inconsistency, then what I am trying to put, probably very ineptly, is that the reality of the relationship must be the focus and it is critical, we would say, that these people are bound not to work for anybody else.

KIEFEL CJ: I think we understand that submission.

MS HANSCOMBE: I am sorry, your Honour, to repeat myself.

GLEESON J: Ms Hanscombe, I have a question. Hamzy does not say anything about indefinite employment as an aspect of this commitment. Where does the concept of “indefinite” come in, which has been discussed at length?

MS HANSCOMBE: It has. I could not say that I can identify a bright line between the relief teacher on the two months and somebody who has worked for 12 months, but if you conceptualise the question as being to identify something which is not ad hoc, not on demand, not irregular, it is unhappy it has to be negative, but it is negative, somewhere in that range the one turns into the other.

EDELMAN J: Your submission is effectively that there is no requirement of indefiniteness understood literally.

MS HANSCOMBE: Yes, yes, it is.

EDELMAN J: A contract for 10 years is a definite term, but it might be hard to say it is casual if it is 10 years of regular employment.

MS HANSCOMBE: Yes, that is exactly so.

GORDON J: In Skene at 171, in dealing with the difference between ongoing employment and non‑ongoing employment, they raise this concept of “indefinite”, do they not, and then use that as the contrast with casual employment?

MS HANSCOMBE: Well, “indefinite”, in some of the cases, seems to have been used in two senses, as either meaning not fixed, not 10 years, or meaning going on for the foreseeable future, because, after all, all employment can be terminated. It can be terminated on reasonable notice ‑ ‑ ‑

GORDON J: Well, that is the first proposition. So the first proposition raised in Skene at 171 is:

on‑going employment is employment for an indefinite term subject to rights of termination ‑ ‑ ‑

MS HANSCOMBE: Yes.

GORDON J: Then the contrast is - and it sets out the characteristics of it both by reference to the employer and employee.

MS HANSCOMBE: Yes.

GORDON J: And then one jumps, by way of contrast, in the next paragraph - it says, by way of contrast:

a casual employee has no firm advance commitment from the employer to continuing and indefinite work according to an agreed pattern of work.

MS HANSCOMBE: An agreed pattern of work, yes.

GORDON J:

Nor does a casual employee provide a reciprocal commitment to the employer.

MS HANSCOMBE: Yes. There might be a definite term. We have given an example in our short outline of the babysitter. When you hire the babysitter for four hours, that is a definite term all right, but there is no doubt the work is casual. There might be a point, to come back to the question that Justice Gleeson was asking me, where, if you said to somebody, I want you to babysit every single Saturday night for the next year, please do not make any other commitments, although the terms are so short, that might be some kind of permanent or non‑casual arrangement.

GORDON J: That is why in Hamzy they say that the essence of casualness is any commitment by the employer or the worker to ongoing employment, so it is the flipside of being indefinite. It is another way of looking at the same idea.

MS HANSCOMBE: It is another way of saying – yes, it is another way of characterising the same idea. Again, none of this ‑ ‑ ‑

GORDON J: But does any of that help you?

MS HANSCOMBE: Well, it helps me in the sense that all that really matters is an assessment of the objective expectations of the parties as to what will happen.

GORDON J: To be found in the terms of the contract?

MS HANSCOMBE: Well, to be found in the terms and in the way in which, as Justice Gageler said, the contract will be administered. So here, for instance ‑ ‑ ‑

GORDON J: So is that post‑contractual conduct that you are looking at when you are putting that submission, or are you looking at it only by reference to the terms of the contract?

MS HANSCOMBE: I am looking at it, for example, by reference to the roster. Now, whether we have a relatively sterile argument as to whether the roster is incorporated into the terms of the contract or not hardly matters because the express terms of the notice say you have to work on the rosters.

EDELMAN J: One difficulty that I am having with the notion of a reasonable expectation as to how the contract will be performed by the worker is if that reasonable expectation is to be determined at a time subsequent to the contract.

MS HANSCOMBE: No.

EDELMAN J: Or whether it is to be determined at the time of the contract.

MS HANSCOMBE: It is to be objectively determined from the circumstances at the time of the contract. That is why I began by talking about the fact of the work here.

EDELMAN J: If that is so, and if it is reasonable to expect something that is not a term of the contract, where does that notion of reasonableness come from, bearing in mind, for example, that the performance of terms of the contract will generally have an implication ‑ ‑ ‑

MS HANSCOMBE: Yes.

EDELMAN J: ‑ ‑ ‑ that those terms will be performed in a reasonable manner.

MS HANSCOMBE: Sure. As long as this expectation is not inconsistent with the express terms of the contract, or derogating from them, there is no bar to the circumstances giving rise to the reasonable expectation.

GORDON J: So you are adding terms, are we now? Is that the consequence of it?

MS HANSCOMBE: We would say there is no need to force this back into the conceptual straitjacket of the contract and say this is now a new term – it is not a new term. The terms are you cannot work for anybody else, you have to work on the roster, you have to do a six‑month qualifying period. They are terms. We do not need to push back any more terms into the contract. They are part of what establishes the universe of possible expectations. So, for example, you could not sign that contract with those terms and then say but I am not going to come whenever I feel like it, because you have bound yourself to work on the roster. We do not need them to add anything else about the terms.

EDELMAN J: Is that then to say that even if the roster is not incorporated into the contract, it is not for an employee to say – or an employee is not able to say, “I am not going to work on that roster”?

MS HANSCOMBE: Yes, because the employee has bound themselves to work on the roster, whatever the roster is.

EDELMAN J: Bound themselves to do it, but other than bound contractually?

MS HANSCOMBE: I do not understand that question. They are bound contractually.

GORDON J: They are not bound contractually. They have got the ability to terminate on one hour’s notice.

MS HANSCOMBE: They have bound themselves to work shifts and rosters as directed.

KEANE J: While the contract persists.

MS HANSCOMBE: Yes, while the contract persists.

KEANE J: And they can bring the contract to an end. If they bring the contract to an end, they are no longer bound to work the rosters.

MS HANSCOMBE: I accept that, your Honour. But, of course, any employment can be brought to an end. A permanent worker can bring their contract to an end. That is just a feature of employment.

KEANE J: Permanent workers might be obliged to give notice.

MS HANSCOMBE: They might.

KEANE J: Mr Rossato was not.

MS HANSCOMBE: No, but he was liable for costs if it cost WorkPac anything.

KEANE J: Yes, if there were costs incurred in moving him to and fro that were wasted by is termination, that might be so.

MS HANSCOMBE: I think, in fact, your Honour, with respect – although, plainly, they would be covered for such costs – there is no evidence at all as to what that clause was intended to cover. I know Mr Walker has said ‑ ‑ ‑

KEANE J: The clause says what it says.

MS HANSCOMBE: It does.

KEANE J: You do not ask people what they thought it meant.

MS HANSCOMBE: My response to you is simply that, if he did that, he exposed himself to claims for damages. So, however realistic that freedom was is difficult to say. It also has an air of frank, commercial unreality from the point of view of Glencore because we can see that induction for these workers takes days. They have to have special training. We also see that Glencore provides them – this is from the materials – provides equipment and clothing. None of this tells in favour of the actual performance of the contract being workers decide on a whim to give an hour’s notice.

GLEESON J: Ms Hanscombe, it is easy to imagine that a mine worker in a mine would have some trouble, realistically, exercising a right to terminate on one hour’s notice ‑ ‑ ‑

MS HANSCOMBE: Yes.

GLEESON J: ‑ ‑ ‑ but was that put in issue by Mr Rossato?

MS HANSCOMBE: Nothing is really in issue because it is the unusual way in which the case came about. The case came about, not on the hearing of evidence, but on a statement of agreed facts. As Mr Crawshaw said to your Honours, it came about because WorkPac wanted to relitigate not making the concession they had previously made. So, the short answer is, who knows? I do not think there is anything else we wanted to say to your Honours.

KIEFEL CJ: Thank you, Ms Hanscombe.

MS HANSCOMBE: If your Honour please.

KIEFEL CJ: Yes, Mr Walker.

MR WALKER: If it please, your Honours. Your Honours, as we would seek to characterise the differences in my reply, the first main issue concerns the question whether it is in the terms of the contract of employment – the contract which creates or forms the relation of employment – and the contract whose terms governs the rights and obligations of the employer and employee, is where the Court goes in order then to perform the question of characterisation – in this case, for the statutory term of “casual employee”.

Although there has been reference to some other kind of discourse, apart from contract by phrases like reality, there has not been any indication, leaving aside the entirely technical exception that proves the rule constituted by quasi‑contract, the apparent agreement for employment which lacks a price, which quantum meruit supplies ‑ apart from that, that nobody has understandably concerned themselves with, because it is an exception that proves the rule – no one has shown how, other than by contract, or more correctly successive contracts, there has been any employment of Mr Rossato, by the suite of documents and, if you have to add it, the conduct of turning up for work by way of acceptance.

In particular, no conduct subsequent to the making of a contract and during the period of employment created by that contract, for the six contracts in question, has been pointed to as constituting any variation. We can put to one side entirely other ways in which subsequent conducts may alter the enforceability or sometimes the content of contractual promises such as an enforceable waiver or such as an estoppel which attracts judicial remedy. None of that operates.

In our submission, that really means there is simply no footing in this case, nor would there be in any case of which it is typical where the relation of employment is created by, and governed by, a contract for some alternative, parallel, or extraneous discourse that looks for what my friend Mr Crawshaw called the essence of the real relationship. There is no essence, any more than there is a set of peripheral features, and there is no reality to a relationship other than that which is created by and governed by contract.

Now, the contract may change. That, in fact, is a frequent experience in what are called, at least in courts of law, “informal contracts” because if the formation, as my friend Ms Hanscombe puts it, initially of a contract is characterised by what lawyers call “informality”, then it is likely that the same parties may, by conduct or words that do not appear to be very portentous when uttered, also in fact have changed the terms of their contract.

None of that has a footing factually in the cases before your Honours, which are characterised by a high level of formality and an absence of any conduct which suggests any change in the substance of rights and obligations. But if, as we submit, it is clear from the exchange of argument, there is to be consideration of what in Hamzy was identified as being for casual employment:

the absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work.

Paragraph 38 of [2001] FCA 1589; 115 FCR 78, at 89. Then the very next breath of that useful statement is to be noted, namely that of course:

is not inconsistent with the possibility of the employee’s work pattern turning out to be regular and systematic.

That cannot be understood as opening the door to any reference to subsequent conduct after the making of a contract, and during its currency, as altering the character of the employment relation created by that contract and governed by its terms, while they remain unaltered. And that, of course, was the point that we would wish to emphasise from Connelly v Wells in answer to a number of our friends’ arguments. What I have just said is exactly in accordance with the way Chief Justice Gleeson put it at (1994) 55 IR 73 at 74, namely:

Where the relationship between two persons is founded in contract –

and that is these cases:

the character of the relationship depends upon the meaning and effect of the contract. In the absence of a suggestion that a contract was varied after it was originally made, its meaning and effect must be determined as at the time it was entered into.

And then his Honour went on to refer to two cases. One where the contract is in writing, which effectively are these cases, and the familiar use and restriction on reference to circumstances surrounding its making, and then cases that his Honour describes as being entered into in circumstances of considerable informality, and strikingly says of the two that:

the basic principles remain the same.

In the latter case you have simply got a factual inquiry in order to determine, sometimes by inference, what the terms of the contractual relationship are – which may evolve in such a relationship.

Now, it is for those reasons, in our submission, that when one comes to put it together with the quality of the firm advance commitment, in light of the facts that are before the Court in these proceedings, the difference between the parties, including interveners, seems to have come down to this, an obscurity as to whether it is said by our opponents that the firm commitment, selecting those two words, can sensibly be understood to be anything other than an enforceable term of the contract, breach of which would sound in damages, mutually.

So the worker would be liable in damages for not turning up to perform in accordance with a roster, notwithstanding the worker is entitled on one hour’s notice to decline, and notwithstanding the third, fourth, fifth and sixth contracts before you, you have seen that there is an express continuing right to refuse shifts and rosters. And that, in our submission, is an impossible position for our opponents to maintain, and none of their arguments explained how anything could sensibly be called a firm commitment, which is not an enforceable contract, and how there could be any contradiction of the liberty to refuse a shift by a firm commitment to perform a shift without there being a variation of the contract and there is no variation of the contract here.

It is for those reasons that it is of the essence to understand that one does not lose a right to refuse because you have repeatedly not exercised it, for example, because you are eager to earn money, or you are eager to please. The notion that by continued non‑exercise of a right you lose it is, in our submission, commercially tyrannous.

It would suggest that, from time to time, against your own self‑interest, you should say no in order to remind the employer that you are not obliged to take every shift. That could not be right and would not under labour estoppel or variation, as considered by this Court in ARF v Gardiner come anywhere near altering the terms of the contract. It is the right to refuse which is of the essence which prevents there from being the commitment, just as there is a right not to offer, which is important as showing the absence of any commitment.

The question of indefiniteness is raised. Your Honours will recall in cases which were factually from what might be considered to be simpler times, at least in the labour market, that the word appears maybe incidentally, but informatively, for example, in Doyle [1936] HCA 66; 56 CLR 545 – this is the boilermaker working at the docks. There is a reference to “indefiniteness” as well as “lack of indefiniteness” – I should say as well as “intermittent or irregularity”. For example, in Justice Dixon’s reasons at 555, last paragraph, the “ill-defined” nature of casual employment is described by his Honour as often involving intermittency or irregularity.

Then at the top of page 557, picking up what your Honours will have seen in Hamzy and in Skene, with respect to so‑called ad hoc arrangements, his Honour talks about the casual:

employment was always –

such as:

could not be expected to last indefinitely.

Then one finds, in Shugg [1937] HCA 50; 57 CLR 485, the one‑day work on the bank holiday in the tramways by someone employed statutorily with the character of being casual. There is a contrast between casual employees and what is called, for example, in Chief Justice Latham’s reasons at 490, continuity of employment, and then on page 496 in Justice Dixon’s reasons, towards the foot of that page, his Honour explaining the statutory power to employ casually as being the activity of the board retaining:

men in its employment who are required for regular work and for an indefinite duration of time -

those being the so‑called permanents as opposed to the casuals. Then at the top of page 497, his Honour contrasts:

a general, indefinite or continuous employment –

That might be called, using simple, perhaps simplistic language, “permanency”:

and an employment for a particular occasion or occasions, or to fulfil some special or defined purpose of brief duration.

That might again, at the risk of being simplistic, be simply described as “casual”.

Your Honours know that social and market conditions have produced really substantial fixed‑term contracts of employment that it would be colloquially absurd to describe as “casual”. A 10‑year term as chief executive officer is an obvious if extreme example, but then so is a five‑year employment in middle management, public service or otherwise. In our submission, when such a case arises, it will be a question of characterisation as to whether such a person is a casual employee or not. It will probably be quite easily answered.

I mentioned those fixed‑term contracts of quite considerable duration in particular because literally they do not happily fit from earlier days the notion of “indefinite duration” being a sign of the permanency which contrasted with casualness, but it is not an issue before the Court in these proceedings and can await a day, if it ever arises, that such a matter would truly seriously call for a contested characterisation of casual or not.

But the notion of an “indefinite term” does of course well describe employment which is terminable on either side conventionally – that is, by market practice on notice. So, when it is formed, you do not know how long it is going to last – hence, indefinite. It might turn out to be quite short because the worker is no good or the employer is running out of money. That will not make it the casual employment, any more than a casual employment, which is happily repeated as the market for the employer’s goods and services, thrives and the worker remains willing – with personal and economic circumstances – to continue to take offers of work – none of which is guaranteed ever to be repeated. That being the essence – that is, a lack of the firm advance – I stress “advance” – commitment.

It is for those reasons, in our submission, that, as a matter of principle, our friends, with respect, are wrong to suggest that there is any way one can step outside – in this case – the terms of the contract in order to gather the features of the relationship created by and governed by the contract for the purposes of characterising the employment as casual or otherwise.

There was called in aid other case law from the United Kingdom – Autoclenz and Uber – that I do not need to go to in any detail, it being, of course, notorious and clear that they were cases grappling with the statutory definition, for labour welfare purposes, of a worker. One will see the particular regulation, for example, quoted in paragraph [35] of Uber. It is a world away, with respect, both textually and conceptually, from what is in question in this case.

But even there, if you look, for example, in paragraph [62] of Uber, I do not need to take you to it, but by way of an illustrative reference, you will see that even there, in a case of written terms, as this case shows, one is looking for what is actually agreed, meaning, what binds between parties. And that is why Foster’s Case is at the level of a relatively informal relationship, a conventional example of, again, looking for the contracts, accepting it may, for example, be varied, and it is, of course, elementary, the terms of contracts can be discerned by courts by examining the implications of not only the words but also the conduct of the putative parties.

Just as a contract can be made partly implied by conduct, so it can be varied, partly implied by conduct, and that is what Foster’s Case was talking about. Those do not represent departures from or qualifications of the general principle for which we have contended. The clarity with which we put that below, contrary to the suggestion made against us this afternoon, can be seen in passages I do not need to take you to, but may cite in our further materials at pages 828, paragraphs 61 and 62 and 831, paragraph 75. There should be no misunderstanding about our position concerning paragraph 444 of Justice White’s reasons. At 444(f) there may be, if I can use the phrase, an ambiguity with his Honour’s reference to:

the employment arrangement considered as a whole –

where his Honour makes the comment:

particularly so when the employment contract is informal –

We do not understand, with respect, particularly given the reference to Doyle, for example, and Shugg, we do not understand that that is a reference to something that is extra, let alone anti‑contractual, that is contra‑contractual, let alone having no contractual force at all. That is the understanding with which we say that is, with respect, correct.

Similarly, in (h), changes in the relationship, of course, the paradigm would be a variation in the contract, we do not suggest, and we do not accept, that there can be changes in relationship which are not either the result of a contract or which constitute a change in the contract. And that much is clear when one goes back to how his Honour had put it, say, in paragraph 442, in the lead‑up to the summary in 444. His Honour there refers to the well‑recognised proposition:

that the terms of an employment relationship may change over time. That may be by express agreement or by –

what his Honour calls:

nuanced accretions.

The kind of tacit acceptance referred to by Mr Justice Dixon in Foster. And then his Honour goes on, importantly:

even in the latter case, one has to be able to identify a variation in the contractual terms, even if one cannot identify precisely when the variation occurred.

In other words, there may be some hard factual decisions, by which I mean “difficult”, but if they can be made, they can be made so as to determine the issues before the Court, such as at least by such‑and‑such a date, the contract had changed, whereby attendance was now required at Blackacre rather than Whiteacre, for example. And, in our submission, when one then comes to paragraph 443, the matter could not be clearer. His Honour points out that those cases where the characterisation unremarkably has been described as:

a question of fact –

include cases where:

the contract was informal and its terms to be inferred from the manner in which the work was performed pursuant to it.

That is not post‑contractual conduct, that is conduct which forms, and sometimes changes, a contract. And then his Honour says:

When the contract is more formal –

and ours is, with respect, very formal:

attention must be given to the agreed terms –

not as a merely relevant consideration, but as the sounding board for all determinations. The terms will govern, it is what they do in contract.

KEANE J: Mr Walker, if we were otherwise with you on this point, what do you say we should say about Skene?

MR WALKER: It is a curate’s egg because there are parts of Skene that do not need to be touched. Could I go to a couple of passages in an attempt to answer Justice Keane’s question. This is [2018] FCAFC 131; 264 FCR 536 and I am going to take your Honours first to 574, paragraph 170. If I may put it this way, typology is introduced as the topic of these paragraphs – taxonomy, if you like. Paragraph 171 starts with the advice, so to speak, that one is looking for:

a characteristic or perhaps several characteristics not present in other categories of a like nature.

So it is the taxonomist’s approach: “That’s a fish; this is an amphibian because of something the fish has the amphibians do not and vice versa”. The first contrast is:

full-time and part-time employment is that those employments are on-going (sometimes called “permanent) employments.

Because nothing is forever, particularly in human life, “permanent” means, of course, “indefinite”, “indefinite” meaning not known at the time of initiation, that is all. That is one of the reasons why it may be another case, or it is certainly not before the Court in this case, the question of substantial fixed‑term employment. They then go on to say, that which must be correct:

On‑going employment does not mean lifelong employment . . . but on‑going is employment for an indefinite term subject to rights of termination . . . It is characterised by a commitment by the employer, subject to rights of termination, to provide continuous and indefinite employment –

Pausing there, we would say, nothing wrong with that. It is to be recalled that their Honours are discussing that which is called “ongoing employment”, sometimes called “permanent”. It goes on:

according to an agreed pattern of ordinary time (as distinct from overtime) work –

That may be overly prescriptive, with respect. It is certainly conventionally true in many, many cases – perhaps, the vast bulk of cases. Then, an important proposition – because it is that which introduces the spectre of somebody like Mr Rossato being sued in damages if, after a long pattern of not refusing shifts, he exercises his right to refuse a shift. Glencore complains to WorkPac and WorkPac says, “My goodness, the expectation, by experience, is that you would not have refused that shift. I am going to sue you in contract for damages” – which is absurd, with respect. So, as their Honours say, we accept a:

corresponding commitment to provide service is given by the employee –

that is, casual employment is not just to be seen as a position of precariousness for the worker. It is also a position of liberty for the worker – that is, liberty from being sued for not giving notice, for example.

There are overly prescriptive matters, in our submission, which follow in the description of full‑time, part‑time, which we need not dwell on. And then we come to 172, which contains a statement that, as your Honours would appreciate, we do not cavil with, except that it may be that the notion of working “to an agreed pattern of work” will require some teasing out in particular cases.

It may be that an agreed pattern, for example, is that you will be available as a permanent or ongoing worker on‑call – that is a familiar current form of employment, particularly in what might be called emergency situations, whether it be to repair computers or to attend at car accidents.

So it may be that this notion of pattern of work describes something which is conventionally very common, but it should not be seen as a prescription as if it were a rule, but that is not a significant criticism of this part of their Honours’ reasons. It is for those reasons, in our submission, that the passage that we rely upon in Hamzy, which is picked up at the end of paragraph 172 in Skene, shows that there is obviously a deal of Skene with which we had no dispute. Over the page, at paragraph 178.

GORDON J: Before you get there, is the answer to this concept of “agreed pattern of work” addressed in 173, where their Honours seem to suggest that irregular or regular:

may not always be apparent but will not necessarily mean that –

it is not casual? In other words, there are certain indicia, but none are determinative, and one has to step back and look at it?

MR WALKER: I think the answer is yes. The descriptions that are given to those indicia in paragraph 173 are described as “usual manifestations” of the quality that would make employment casual. Perhaps, at most, they are, as it were ‑ ‑ ‑

KEANE J: They are not criteria.

MR WALKER: No.

KEANE J: They are evidentiary.

MR WALKER: Thank you, your Honour. They are certainly not what I would call checklist aspects of a rule. In particular, when one looks at “uncertainty”, you have got to ask, uncertainty about what. If you are talking about uncertainty about more work beyond the casual engagement, then uncertainty is correct.

KEANE J: And you have answered the question.

MR WALKER: Quite. But it is not uncertainty about the two hours that somebody is asked to fill in at the cash register because everyone is sick; that is casual work, no doubt about it, but it is certain it is two hours and, as it happens, it is also fixed duration, but it is casual. There is no firm advance commitment, et cetera. It is ridiculous to suggest that a two‑hour checkout assignment – any more than a three‑day carrot‑pulling assignment is, because it is known about the time – is not casual.

Those are not words which lend themselves to being treated as rules or specifications, and even here they are only talked about as “usual manifestations”. And so these are indications, but they are not enough probably to deal with all the aspects that might be raised when a case comes along about fixed‑term contracts. In paragraph 178, their Honours refer to:

employment arrangements may change during the course of an employment.

And we would not understand the rest of that paragraph to be going outside changes to the contract. But if they do – and this is a belated answer to Justice Keane – if they do, they are wrong, and this Court should say so. One of the reasons why it ought not to be read as going so far as to be wrong in that way is because of the quotation from Justice Buchanan in Ledger in paragraph 179 – where you see the reference, I should say, to a “tacit understanding” and “a regular ongoing engagement”, which would appear to be a variation of contract by conduct, implied by conduct.

If it is something other than that, let alone more nebulous than that, then it is to be deprecated as a matter of principle and policy, and as a matter of law, this Court is in a position to say it would be wrong, and should so say. In paragraph 180, there commences a passage which ought now receive from this Court at least a mark of “beware”, if not a statement that it is just wrong.

It certainly mixes up jurisprudence in a way that is not useful. Distinctions between employment and independent contractor are not, of their nature, likely to be very informative as to distinctions between permanent and casual employment.

It is for those reasons, in our submission, that 180 should not receive endorsement favourably from this Court. The first sentence of paragraph 180 is, in our submission, one which is in the, I hope, correct sense of the expression “question begging”. One sees a reference here to:

the real substance, practical reality –

I am at lost to tell your Honours what other kind of reality there might be, or what the epithet “practical” adds to it:

and true nature of that relationship –

The word “true” is an indication that what is being done here is an invitation to characterise something differently from the way the contract does it. Now, that must be right in an orthodox way for the unremarkable proposition about labels, particularly labels which are defensive, or which betray an understandable nervousness about the genuineness of what the parties have stipulated, as Mr Justice Dixon pointed out in Foster in the passage with which your Honours are familiar.

Of course, parties who create a partnership and protest they are not partners will be disappointed as to the lack of regard for their chosen description shown by a court asked to rule whether there is a partnership or not. The same thing goes for fiduciaries, agencies and employment. But apart from that matter of law, that is, it is for a court to attribute legal character to a relationship, not the parties, a process in which the parties’ choice of words will be relevant but not determinative, it is important to appreciate that in this case nobody is saying there is any sham, and nobody is saying that there is anything about the terms obtaining at the beginning of each of the six contracts which were not in fact terms the benefit of which could be taken by the parties respectively.

It is for those reasons that, after ringing the changes on independent contractor cases, in that paragraph 180, after the reference to ACE Insurance, the categorical statement that:

The same approach is appropriate to adopt –

et cetera, is simply wrong, and should be held so by this Court. That is my answer to Justice Keane’s question. It is a curate’s egg, there are bits that are right, and should be endorsed favourably, and there are important parts that are misleading in terms of the correct approach to be taken.

GORDON J: Does your criticism of that extend then over, as I understand the submission, to include 181 and 182?

MR WALKER: Yes. A “beware” sign, at the very least, would be the appropriate response by this Court.

Your Honours, in this part of the case there has been launched the idea, we think one of the attempts to propose that the character of casual employment in this case can and should be discerned from other than the contract, of what I noted in one of the forms as being objectively a mutual expectation, perhaps using the epithet “reasonable”, of how the contract would be administered or how it is performed.

We submit that these are not useful phrases, either as a matter of the policy of the law or indeed as a matter of the relevant principles which are principles of contract and of course of statutory interpretation. For a start, when one talks about expectations about how a contract would be administered or performed, which are not themselves simply terms of the contract, maybe varied terms of the contract, so it is somehow outside or regarding the contract but not of the contract, there is obviously a major instability about insisting on it being objective.

“Objective” makes sense for terms – see Taylor v Johnson – but for expectations outside a case of representation by terms of contract, itself a very problematic area, the notion of there being an objective expectation never subjectively entertained by either party of the contract does not seem a very useful addition, would seem to be a very un‑useful complication of law, both statutory and contractual, governing a relation of employment.

So that a court objectively says you did not, in fact, feel this but, objectively you could have, should have, reasonably felt this. It is not a term in the contract. In our submission, that is to introduce a new peril to a matter which – when contracts have been made formally – are intended to give the socially advantageous outcome of the certainty of knowing what your terms are – what binds you – what characterises the relation from which then statutory rights and obligations may flow.

EDELMAN J: There are many instances where there is no difficulty in implying a term for performance in a reasonable way to a contract.

MR WALKER: Exactly. A reasonable time for things to be done is, perhaps, the everyday example of that. We entirely accept that that has nothing to do with expectations. That has to do with an implied term. Usually, a factually implied term – sometimes so frequent in experience and human usefulness as to be a legally implied term. But that is all within the contract – it is of the contract.

There is also another instability of a kind producing unpredictability where that is plainly not to be accorded, between what might be called hopes and expectations. There is no sense in talking about an expectation that a contract will be honoured. That is not outside the contract and does not add anything to the contract. Subjectively – that is, psychologically, for a real person – to say that one hopes that you will be earning coalminers’ wages for the life of mine – physical fitness permitting – says nothing about the terms of a contract whereby you have just been offered an assignment of a particular duration – variable as to duration and variable as to the shifts to be worked during it.

It is simply not to the point for someone to come along and say, “I know I have been employed casually – I know the contract does not require you to give me more work but, in fact, you have given me work whenever I have wanted it for the last two years. I have hope – I would call it an expectation – I have informed my bank manager of that – I will have that in the future”.

In our submission, that ought not to be allowed to intrude upon the matter of characterising the relation created by the contract, and still governed by the contract, particularly for the purposes of important statutory rights with, in terms of national spread, massive economic consequences. It is for those reasons, in our submission, that there is nothing useful, and a number of things most inconvenient, to be gathered from, or to be gained from, allowing these nebulous concepts of mutual expectations which are not of the contract itself to be at play in this area.

Very briefly about rosters. Rosters are all subject to variation, both directly and by the capacity to truncate assignments. So a roster that says something for the coming October is, under all of the contracts, capable of being varied, that is, there will be no work in October – that is the first thing. The second thing is, the assignment is terminable more or less peremptorily on both sides.

It is for those reasons that nothing can be gained from the rosters in this case ‑ nothing at all can be gained from the rosters in this case, informative of the existence or not of the requisite firm advance commitment which would indicate that that which was agreed by the parties to be called casual, was not in fact casual.

In‑chief, your Honours will recall, I hope exhaustively, went through the terms of the contracts from the suite of documents where, as well as 5.5 and 5.6 there is 5.12, as your Honours will recall, in the general terms, of a kind that make it quite impossible to say that even if by email, rosters, when they were supplied by the employer, WorkPac ‑ and they were not all, but when they were supplied ‑ even if the email made them part of the suite of documents, there is nothing in the roster that could possibly be said to have deprived WorkPac or its client of the right to vary shifts and rosters, one would have thought a very important interest, power for WorkPac and the client to retain.

No one has ever suggested that the supply of that roster to Mr Rossato suddenly froze Glencore into having to have rosters that far ahead just like that, that would be absurd and totally contrary to the flexibility that one would expect all mining operations to have, and which, elsewhere, the terms of the contract, to which I have referred you in‑chief, make it clear that Mr Rossato must observe. In return, it can be said, correlatively, he has a deal of flexibility. It is for those reasons that the rosters add nothing to the case against us.

My friend, Mr Murdoch, was asked for a finding as to whether rosters were contractual. We respectfully submit you will not find such a finding, even between the lines. Contractual is not quite as far as it needs to go, unless it is a promise that there will be work by the people in question at the times and places set out in a roster, come what may, then all you have is future rosters being like many other works of man, they are subject to, if I can call it this, the real world. They may change. All of that was expressly contemplated in the notices of offer and the general terms. It is for those reasons that even if they were contractual, they certainly are not promissory in terms of stipulating, let alone by firm advance commitment, as to what work there would be.

Of course, rosters make sense for casual workers. If you are part of a casual gang to pull a field of carrots, presumably the different tasks involved means you all have to turn up at the same time. The same is true if you are casually flipping hamburgers. You are in a team. So, there are rosters but that does not say anything about the firm advance commitment. That is a bit like saying a casual employment is an employment, it requires you to do the work for which you are casually employed. That says nothing about the question of characterisation.

There was argument against us which seemed to call in aid the notion of there being resort to extracontractual material which becomes such as to include, we think, post‑contractual conduct, because of ambiguity.

Now, with great respect, this is perhaps an understandable matter to have been raised against us, bearing in mind some of the discussion in Justice White’s reasons, picking it up perhaps at core appeal book 156, paragraph 513 and following. I am not going to dwell on it in detail. It suffices to say that by the time one gets to paragraphs 524 to 526, ambiguity is being referred to.

Neither in these reasons, in this part of the reasons – and it continues for quite a length – nor more particularly in the arguments to which I am replying, have your Honours had identified, by reference to a word or phrase, in the writing found in the suite of contractual documents, anything said to be ambiguous in any relevant sense of that word.

Of course, as a matter of principle, whether or not there is an ambiguity gateway can be put to one side. That area of the law, as found in this Court, has to do with the interpretation of a contract and there are strictly limited ways in which any conduct subsequent to its making can cast any light on that – simply limited ways that find no possible foothold in the facts of this case.

There are no extrinsic facts before the making of this contract that cast any light on how any of these unspecified terms, said in some unexplained way to be ambiguous, could produce the opposite of what the express words do say concerning the capacity to vary, to refuse, et cetera, et cetera, and to terminate.

In paragraph 566 there commences some reasoning which, in our submission, adopted as it appears to have been by our friends against us, ought to be identified as being simply wrong. The notion of rosters I have already dealt with, I do not need to add to. The notion of:

regular and predictable hours of shift work in accordance with the roster –

does not add anything to it, they were all still subject to variation, and stipulated in the contract to have been notified by way of guide only. The “pattern” that his Honour refers to at the end of page 566 is a tendentious phrase which, apparently, would include a lack of pattern, that is, the possibility of a relative inconsistency. But the fact is that we are talking about people working on a multi‑worker site. That is why rosters are de rigueur, and that is why observable pattern, as a matter of experience, will say nothing whatever about the casual nature of the employment of some of the workers present on site from time to time.

Paragraph 572 is also one we think relied upon against us in this Court, which ought to be identified as being wrong. There is, in our submission, a slide of concept that needs to be identified. The first sentence, perhaps the nub of it is to be found in the adverb “expressly”.
Well, it is just a question of whether a term is in the contract or not. It is most unlikely to be without any expression. But it is not about whether it is found expressly in the contract, it is about whether it is found in the contract. But there is a slide, it is then:

no reason in principle why the commitment may not be discerned from the contract considered as a whole.

And if all his Honour is saying is that the commitment may be implied rather than expressed, then we wholeheartedly accept that. But that, in our submission, says nothing whatever about looking outside the contract. To consider the contract as a whole still confines you to the contract. And then his Honour uses the expression “unspoken mutual understanding” and refers to the academic.

In our submission, that is to have opened the door to another incoherent and unstable body of consideration quite alien to contract law, unless it is the familiar, old‑fashioned making, and perhaps variation, of a contract – usually informal – to be implied by conduct. If it is that, then there is no objection. If it is anything more than that, it is unsafe and should be identified as such. At paragraph 582 – I am sorry, I can ignore that. May it please the Court.

KIEFEL CJ: The Court reserves its decision in this matter and adjourns to 9.45 am tomorrow.

AT 3.55 PM THE MATTER WAS ADJOURNED