Casual Employment Reforms

The Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2021 (Bill) was passed by Parliament on 22 March 2021 and the Act will commence the day after it receives Royal Assent.

The Bill was stripped back and amended before being passed. The remaining provisions of the Bill are those related to casual employment. Provisions related to award flexibility including hours for part time employees, streamlining and improving the enterprise agreements process, strengthening compliance and enforcement including for wage theft and measures to support more efficient Fair Work Commission processes were dropped.

Meaning of casual employee

The term ‘casual employee’ is not currently defined in the Fair Work Act 2009. The Bill introduces a definition of casual employee. A person will be a casual employee if:

• an offer of employment made by the employer to the person is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person;
• the person accepts the offer on that basis; and
• the person is an employee as a result of that acceptance.

The definition provides that the only considerations in determining whether no firm advance commitment to continuing and indefinite work is made are:

• whether the employer can elect to offer work and whether the person can elect to accept or reject work;
• whether the person will work only as required according to the needs of the employer;
• whether the employment is described as casual employment;
• whether the person will be entitled to a casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument.

A regular pattern of hours does not of itself indicate a firm advance commitment to continuing and indefinite work.

The question of whether a person is a casual employee is to be assessed on the basis of the offer of employment and the acceptance, not on the basis of any subsequent conduct of either party.

A person who commences employment as a result of acceptance of an offer of casual employment remains a casual employee until:

• the employee’s employment is converted to permanent employment; or
• the employee accepts an alternative offer of employment (other than as a casual employee) by the employer and commences work on that basis.

Casual conversion

In addition to existing casual conversion clauses in some Awards, the Bill introduces a statutory obligation for employers (other than small business employers) to offer casual employees the ability to convert to permanent employment if:

• they have been employed for a period of 12 months; and
• during at least the last 6 months of that period, they have worked a regular pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to work as a full-time or part-time employee (as applicable).

However, an employer will not be required to make an offer if there are reasonable grounds not to, based on facts known or reasonably foreseeable at the time of the decision. Reasonable grounds include:

• the employee’s position will cease to exist within 12 months;
• the hours of work will be significantly reduced;
• there will be a significant change in:
  • the days the employee’s hours are required to be performed; or
  • the times the employee’s hours are required to be performed;
  which cannot be accommodated within the employee’s availability;
• making the offer would not comply with a recruitment or selection process required by law.

The Bill sets out notice requirements for making, accepting, and refusing an offer.

Orders relating to casual loading (i.e. to prevent double dipping)

If an employee is misclassified as a casual and claims relevant entitlements (e.g. paid leave, public holidays, redundancy pay), the Bill requires a court to reduce the amount payable by an amount equal to the casual loading already paid.

The court may also reduce the claim by a proportion of the loading if the contract specifies which entitlements the loading was intended to offset.

Small claims

The Bill allows disputes related to casual employment (e.g. casual conversion) to be dealt with as small claims proceedings.

Information Statement

The Bill requires the Fair Work Ombudsman to publish, and employers to provide to their casual employees, a Casual Employment Information Statement.

Contact Us

Industry Legal Group can provide clients with information and advice on workplace relations and employment law matters. Please contact Industry Legal Group on 1300 736 435 or mail@industrylegalgroup.com.au if you have any question relating to this article or to discuss any issues that arise in your business.

This article is intended for general information purposes only and should not be regarded as legal advice. Please contact Industry Legal Group if you require any legal advice.

26 March 2021