Big Changes to Casual Employment, Care of the Watered-Down IR Bill
The Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Act 2020 (Act) is now law, a watered-down version of the Federal Government's original IR Omnibus Reform Bill (the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020 (Bill)) having passed through both houses of Parliament on the 22nd of March 2021.
Whilst it won’t commence until it received Royal Assent, we thought we would summarise some of the key points relating to the big changes for casual employment.
Finally, a Definition of a Casual Employee
Excitingly, the Fair Work Act will now define a casual employee as an employee who accepts an offer of employment which makes 'no firm advance commitment to continuing and indefinite work according to an agreed pattern of work'.
This is very important and exciting as up until now, the Fair Work Act has not defined a casual employee and this has caused much contention and pain for employer, employees and the Courts.
To work out if there is a 'firm advance commitment' only the following factors can be considered:
- whether the employer can elect to offer work and whether the person can elect to accept or reject the work;
- whether the person will work only as required according to the needs of the employer;
- whether the employment is described as casual employment; and
- whether the person will be entitled to any casual loadings or a specific casual rate of pay under the offer of employment or a Fair Work instrument.
A regular pattern of hours does not of itself indicate a 'firm advance commitment'.
The question is to be assessed at the time of the offer and acceptance of employment, and without regard to any party's subsequent conduct during the employment.
Casual Conversion
Employers (other than small business employers (less than 15 employees)) will be required to offer to convert any casual employee to full-time or part-time employment if the employee:
- has been employed for at least 12 months; and
- for at least six of those 12 months, has worked a regular pattern of hours on an ongoing basis that, without significant adjustment, could continue to be worked as a part-time or full-time employee,
unless there are reasonable grounds not to do so.
Casual employees will also have a residual right to request conversion to full or part-time employment themselves. Employers can only refuse such requests on reasonable grounds (set out in the Fair Work Act) and must respond in writing within specified timeframes. In the event of a refusal, employers must consult with the casual employee before formally refusing their request for conversion.
There is a 6 month transition/lead time for employers to make offers of conversion to all existing eligible casuals, unless they have reasonable grounds not to.
New Information Sheet
Similar to the Fair Work Information Statement (which is required to be provided by employers to all new employees), employers will need to provide a copy of the Fair Work Ombudsman Casual Employment Information Statement to casual employees before, or as soon as practicable after their commencement. This information sheet is yet to be published and it will be interesting to see what it contains.
Incorrect characterisation and offset provision
If a court finds that a current or former employee has been incorrectly characterised as a casual, the court will be able to offset any identifiable casual loading paid to the employee against claims for certain entitlements.
Importantly, the employer must have properly attributed the loading as being paid for that purpose.
It is vital, now more than ever, to ensure employers have in place well drafted contracts of employment as they will be imperative in enforcing this provision – particularly with respect to carving out the casual rate of pay and loading and defining what the loading is in fact compensation for.
Where to From Here?
Employers who have not yet taken steps to review their casual workforce, their rosters and contracts of employment should do so now.
For advice and support on how these changes may impact your workplace and to implements measures to support and safeguard your business, contact Enterprise Legal’s Workplace Relations team today: