Casual employment, double dipping and conversion rights addressed in Government reforms

by | Dec 16, 2020 | Employment Law and Workplace Relations Blog

The Australian Government has introduced a Bill that defines what it means to be a casual employee, enshrines a legislative right for casual conversion and addresses the casual loading double-dipping issue that was central the Federal Court’s Workpac Pty Ltd v Rossato (Rossato) decision earlier this year. The Minister for Industrial Relations – Christian Porter says the aim of the Bill is to ensure certainty for employers and fairness for employees.

The Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 (the Bill) was introduced into Federal Parliament on 9 December 2020.

Amongst other things, the Bill introduces a common statutory definition of casual employment; enables casual loadings to be set-off against leave and other entitlements if an employee has been incorrectly classified as casual; and would create a statutory obligation for employers to offer regular casual employees conversion to full-time or part-time employment.

Defining casual employment

The starting point for defining casual employment under the Bill is to consider the nature of a person’s employment at the time they were employed.  Later changes to the nature of the employment will not change a person’s casual status but may provide a basis for the person to seek conversion to full-time or part-time employment after 12-months.

Employment is deemed casual if the employer offers, and the employee accepts, employment where there is no firm advance commitment by the employer to “continuing and indefinite work according to an agreed pattern of work”.  Under the Bill, the considerations a court could have regard to when determining whether the “firm advance commitment” is present in any case are limited.  They are:

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

By itself, the pattern of hours does not indicate the employment is casual.

Casual conversion rights and obligations

A person who commences as a casual employee remains casual until the employee accepts an alternative offer of full-time or part-time employment, or until the employment is converted to full-time or part-time.

Employers will be required to offer conversion to full-time or part-time employment if the employee has been employed for 12 months and if during the last 6 months, the employee has 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.  However, if there are reasonable grounds not to offer permanency (such as the employee’s position will cease within the next 12 months or their hours significantly reduced) then an employer does not need to offer permanency but must give the employee a notice describing the reasons permanency is not being offered.

Additionally, employees retain a right to request casual conversion in particular circumstances (including they have been employed for at least 12 months, have worked a regular pattern of hours for the preceding six months and in that time have not refused their employer’s offer to convert from casual to full-time or part-time employment).  Importantly, employers must not reduce or vary and employee’s hours, or terminate them to avoid casual conversion obligations.

Employees requesting conversion must make a written request and employers must respond in writing within 21 days.

Preventing a casual loading “double-dip”

Previous decisions of the Federal Court (including Rossato) have identified that setting-off an employee’s entitlement to paid leave against casual loadings paid to them, is complex and sometimes open to challenge.

The Bill would address this problem by requiring courts to set off the amount of identifiable loading paid to an employee against any leave, notice or redundancy amounts claimed by the employee due to their employment not being casual.

 

Key take-aways

  • A definition of casual employment and protections against double-dipping are intended to provide certainty for employers with the aim of increasing hiring confidence.
  • For some employers that employ significant numbers of casual employees, the Bill’s proposed casual conversion rights will require employment and HR governance procedures to be updated or developed to meet compliance and record-keeping requirements.
  • It appears likely though that the Government’s objective of encouraging a greater uptake of part-time and full-time employment arrangements is achievable under the Bill.

 

If you would like to know more about the proposed changes to casual employment arrangements or ways in which Panetta McGrath Lawyers can help your business plan for changes in 2021, please contact our Employment and Workplace Relations team on (08) 9321 0522.

Natalie Zurita

Natalie Zurita