Most of the government’s industrial relations reform agenda didn’t get through Parliament in March. But the provisions of the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 relating to casual workers did. Amendments to the Fair Work Act that affect the way we engage casual workers in Australia became law on 27 March 2021.
Since then, the Fair Work Ombudsman (our industrial watchdog) and the Fair Work Commission (in charge of awards, enterprise agreements and disputes), have had an opportunity to adjust. So here follow the key changes to casual employment in a nutshell[1]:
The Fair Work Act
We now have a definition of casual employment. This will be found at section 15A of the Fair Work Act.
Under the new definition, a person is a casual employee if they accept a job offer from an employer knowing that there is no firm advance commitment to ongoing work with an agreed pattern of work[2].
This is essentially a return to what was the norm for so many years before the double dipping casual cases rose to fame; if the parties describe the work as casual, it’s casual. Except that there are limits; stamping a ‘casual’ label onto a work arrangement that has the hallmarks of permanency will not make the worker a casual. Only the offer and acceptance (not subsequent conduct) is relevant to this assessment, so careful drafting should allow the parties to enter into their arrangement of choice.
A brand new National Employment Standard establishes new conversion to permanency rights for casuals:
Employers (other than small business employers[3]) have a new obligation to offer casual workers an opportunity to convert to permanency. Permanent employment does not include fixed term, fixed task or fixed season contracts.
Large employers must assess the working patterns of new casuals after twelve months’ service. The employer will be obliged within 21 days[4] to make a written offer to convert to permanency if the casual has in the last six months worked a regular pattern of hours on an ongoing basis which, without significant adjustment, they could continue to work as a full-time or part-time employee.
An exception applies if there are known facts or reasonably foreseeable facts that establish reasonable grounds not to make the offer. These include such things as the position will cease to exist or the hours will be significantly reduced within twelve months, there will be a significant change in the days or times of work which cannot be accommodated by the employee, or non-compliance with a government recruitment process. However, the employer must still provide the employee with written notice of their decision not to make the offer or their assessment that the employee has not worked regular hours (with reasons).
Employees are required to respond in writing within 21 days as to whether they accept or reject the offer. If they reject the offer (or don’t respond) they continue to be a casual.
If employees accept the offer, the employer must discuss the terms with the employee and confirm them in writing within 21 days. The commencement date must be the first day of the employee’s next full pay period after that notice, unless the parties agree otherwise.
Separate from a large employer’s duty to offer conversion, casual workers also have a right to request conversion, regardless of the employer’s size. These casuals need 12 months’ service and they must have worked a regular pattern of hours in their last six months. The employer must not refuse this request unless they have consulted with the worker and have reasonable grounds for doing so. A similar correspondence framework to that described above applies.
There are anti-avoidance provisions and disputes can be resolved by the Fair Work Commission if other dispute resolution processes have not been agreed. Casuals can also apply to a magistrates court or the Federal Circuit Court for an order regarding casual conversion. If these changes cause confusion as to how an enterprise agreement operates, you can apply for a variation by the Fair Work Commission.
Employers must now provide casuals with a Casual Employment Information Statement on commencement and twelve monthly[5].
The new section 545A of the Fair Work Act does away with double dipping casual claims by allowing employers to offset an identifiable casual loading amount against any claim for permanency benefits that a ‘permanent casual’ may bring.
We no longer have ‘long term casuals’. Now we have ‘regular casuals’. Service as a regular casual will count towards the right to request flexible work arrangements and parental leave (12 months). The amending Act clarifies that casual service does not count towards accrual of annual or personal leave, notice of termination or redundancy rights.
So what happens to my current casuals?
Casuals:
- Who were employed immediately before 27 March 2021; and
- whose initial employment offer met the new definition of ‘casual’
continue to be casual employees under the Fair Work Act.
We recommend employers revisit arrangements for those ‘casual’ employees who do not meet the new definition.
The Fair Work Ombudsman
The Fair Work Ombudsman has published information about these amendments at fairwork.gov.au and has published the Casual Employment Information Statement.
The Fair Work Commission
On 9 April 2021 the President of the Fair Work Commission published a statement about the casual employment reforms on the Commission’s website.
The Fair Work Commission is commencing a review to address inconsistency or uncertainty in modern awards regarding casual employment to ensure consistency with the Fair Work Act. Parties that cannot resolve casual conversion disputes can lodge a Form 10A in the Commission but the Commission encourages parties to resolve these issues at the workplace level. Applications to vary an enterprise agreement to resolve uncertainty require lodgement of the Form F23C.
In summary
Love them or hate them, these amendments provide greater certainty. Once employed as a casual, an employee will continue to be a casual employee until they either:
- become a permanent employee through:
- casual conversion, or
- are offered and accept an offer of full-time or part-time employment, or
2. stop being employed by the employer.
Of course, there will be cases testing the boundaries of the new laws.
What to do?
- Review your casual contracts to ensure they comply with the new laws;
- Prepare for 27 September 2021; and
- Keep an eye out for changes to modern awards in response to this legislation.
For further information or assistance to review current staffing arrangements contact Thea Birss at tbirss@vardons.com.au or on 0422 203 184.
[1] This is a summary. There’s no substitute for reading the amending Act.
[2] Key indicators of an absence of the requisite firm advance commitment will be irregularity, uncertainty, unpredictability, intermittency and discontinuity in the pattern of work. It is possible for a true casual to have a regular and systematic work pattern, but there must be an absence of a firm advance commitment to ongoing ordinary time hours that form an agreed pattern. Examples include the relief teacher who fills in for various staff continuously throughout a term, and an employee who has regular hours of work but the work is dependent on unpredictable funding (WorkPac Pty Ltd v Skene [2018] FCAFC 131).
[3] A small business employer is an employer with fewer than 15 employees at a particular time. Employees are counted on a ‘headcount’ basis including regular casuals and employees of associated entities.
[4] The offer must be made to existing casuals by 27 September 2021.
[5] Large employers are not required to provide these to existing casuals (as opposed to new casuals) until 27 September 2021 but small business employers must do so as soon as practicable.