The High Court has overturned a lower court judgment that paved the way for long-term casual workers to be paid leave entitlements.
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The Federal Court in May last year found workers employed on a regular, permanent basis were not casuals under the Fair Work Act making them entitled to annual, sick and other leave.
The court held mining truck driver Robert Rossato was entitled to be paid a 25 per cent casual loading along with leave entitlements because of his regular pattern of work, backing up an earlier ruling.
But seven High Court judges on Wednesday unanimously allowed an appeal from labour hire company WorkPac, which had employed Mr Rossato as a production worker in Queensland's open-cut coal mining industry.
The High Court held that a casual employee has no firm advance commitment from an employer about the duration of their employment, their days or hours of work, and the employee provides no reciprocal commitment to the employer.
Mr Rossato's employment was expressly on an "assignment-by-assignment basis", the court said.
He was entitled to accept or reject any assignment and the fact he was rostered long in advance did not establish a commitment to an ongoing employment relationship.
"The contractual arrangements between WorkPac and Mr Rossato did not include a mutual commitment to an ongoing working relationship between them after the completion of each assignment," the High Court concluded.
"The express terms of the relationship between WorkPac and Mr Rossato were distinctly inconsistent with any such commitment. Mr Rossato's entitlement to remuneration was agreed on that basis."
The Australian Industry Group said the Federal Court decisions had created $39 billion in cost risks for employers from potential "double-dipping" claims.
"The decisions were also a major risk to the work patterns of the many Australian workers who prefer to work on a casual basis," Ai Group chief executive Innes Willox said.
He said the High Court ruling was still important despite the federal government legislating in March to prevent workers claiming casual loadings and leave entitlements.
ACTU secretary Sally McManus said casual workers in mining were paid $30 an hour less than permanent colleagues and had no rights to leave entitlements.
"The outcome of today's decision is yet another blow for many hard-working Australians, who have nothing left to give after 18 months of economic hell," she said.
Ms McManus called on the Morrison government to commit to cracking down on casualisation and labour hire operators with exploitative "permanent casual" models.
Steve Knott, chief executive of resources and energy industry employer group AMMA, said common sense had prevailed.
"The damage these decisions have had on business confidence in just about every sector of the economy has been enormous," he said.
Mr Knott said the government decision to legislate had been vindicated and class action litigators "circling Australian employers like sharks" fended off.
Labor's industrial relations spokesman Tony Burke said the ruling was disappointing but had limited effect because of the reforms passed earlier in the year.
"Mr Morrison already teamed up with One Nation to pass industrial relations changes that extinguish the rights of casual workers."
The mining union that had intervened in the case argued the Federal Court had twice confirmed the "permanent casual rort" in the industry is unfair and unlawful.
Australian Associated Press
