The Federal Government has been introducing a number of changes to the Fair Work Act 2009 (Cth) under the heading of Closing Loopholes.
This article concerns casual employees.
A decision in the High Court concerning casual employment, WorkPac Pty Ltd v Rossato [2021 HCA 23, created a definition of a casual employee, one that placed some clarity and stability on what a casual is, the closing the loopholes bill set about changing this definition.
Commencing 1 July 2024, providing no changes are made, the definition of a casual employee will be:
a) The employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work; and
b) The employee would be entitled to a casual loading or a specific rate of pay for casual employees under the terms of a fair work instrument if the employee were a casual employee, or the employee is entitled to such a loading or rate of pay under the contract of employment.
Points to consider when applying this definition include:
1. Whether there is an inability of the employer to elect to offer work or an inability of the employee to elect to accept or reject work;
2. Whether having regard to the nature of the employee’s enterprise, it is reasonably likely that there will be future availability of continuing work in that enterprise of the kind usually performed by the employee;
3. Whether there are full time or part time employees performing the same kind of work in the employer’s enterprise that is usually performed by the employee;
4. Whether there is a regular pattern of work for the employee.
Takeaway Advice
1. This will likely create a new conversion process for casual employees converting to permanent employees.
2. The status of an employee employed as a casual employee, may change a be a dynamic relationship, one that an employer will need to manage closely.
3. It is likely this will not replace the current conversion process, but instead add a layer of responsibility for an employer.
4. The small business provisions are likely to remain the same, that is an employment relationship will need to have been in place for 12 months for small business.
5. Backpay may arise where a classification and or payments are incorrect.
An interesting note to this legislation is that an employee will still have a choice, that is no employee will be forced to convert to permanent unless they elect to, again this means the employer must keep records of these discussions and should always require the employee to respond to a conversion offer in writing.
The Fair Work Commission will have the power to manage disputes involving casual conversion, including arbitration.
Given this new legislation places further obligations on business, it is recommended that employers seek advice as to the ongoing management of casual employees. As these changes are not introduced until July 2024, organisations have an opportunity to start preparing for these changes, you should consider undertaking a review of all casual employees, evaluating their situation with that of the proposed legislation and identifying issues ahead of any changes being implemented.
At Salt Legal, we provide advice and assistance to client in all areas of:
· Employment law.
· General business and commercial law or disputes.
· OHS.
· Equal opportunity.
· Workers’ compensation,
For up-to-date information and articles, please follow Salt Legal on LinkedIn - Salt Legal - LinkedIn
For an initial no obligations discussion, please contact Salt Legal at info@saltlegal.net or www.saltlegal.net