Employment Law update – Important update for businesses utilising casual employment
Following a decision of the Full Court of the Federal Court, the Federal Government has amended the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2021 to address the uncertainty surrounding casual employment. The amendments passed both Houses of Parliament on 22 March 2021 and will soon become law.
As such, employers need to be aware of the key points to the Bill as it will impact the way casual employees are initially retained.
While the Bill has sought to clarify the ongoing nature of casual employment, employers have a greater responsibility when they initially retain a casual employee to explain the nature of their casual employment.
If an employer cannot demonstrate the casual employee was aware of the terms of their casual employment at the time of their initial employment, it is unlikely they will receive any benefit of doubt. Consequently, now more than ever, it is critical that even with casual employment arrangements the terms of the employment are recorded in the appropriate written employment agreement.
Employers must also remain vigilant on the retaining of their casual workforce. Periodic review procedures should be implemented to ensure there is compliance with the applicable timeframes as set out in the Bill.
Key points in The Bill
1. There is now a definition of a casual employee
Section 15A(1) – A Person is a casual employee of an employer if:
- an offer of employment made by the employer to the person and is made on the basis that the employer makes no firm advance commitment to continuing indefinite work according to an agreed pattern of work for the person; and
- the person accepts the offer on that basis; and
- the person is an employee as a result of that acceptance.
2. There is now an exhaustive list of factors for an employer to confirm with an employee at the time of making an offer of casual employment
Section 15A(2) – At the time the offer of casual employment is made regard must be given to the following considerations:
- 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 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 a casual loading or a specific rate of pay for casual employees under the terms of the offer or fair work instrument.
3. Non small business employers are now compelled to offer casual employees conversion to permanent employment
Section 66B confirms that an employer must make a written offer to a casual employee to convert to a permanent employee where they have worked for their employer for at least 12 months and have during the last 6 months of that time worked a regular pattern of hours on an ongoing basis. Small business employers are exempt from this requirement. A small business employer is an employer who has 15 or less employees.
Section 66C(1) confirms an employer is not required to make a casual conversion offer if there are reasonable grounds to not make the offer. These reasonable grounds can include:
- the employee’s position will cease to exist in the next 12 months;
- the hours of work the employee will be required to work will be significantly reduced;
- there will be a significant change in the days or times the employee is required to work; or
- making the offer would not comply with a recruitment or selection process required by or under the law of the Commonwealth or State or Territory.
4. Casual employees can request conversion to permanent employment from non small business employers
Section 66F confirms a casual employee may make a request of casual conversion where they have been employed by the employer for at least 12 months and in the last 6 months the employee has worked a regular pattern of work. Note, however, small business employers are exempt, and an employer has reasonable grounds for declining such a request.
5. Employers can now off-set payments made to casual employees
As a direct response of the Court’s decision, and for the benefit of employers, section 545A has been introduced. Section 545A now confirms, that subject to certain conditions, if an employee was paid casual loading benefits when they were employed as other than a casual employee then the additional benefits payable by the employer can be off set against the casual loadings they have already been paid. Section 545A now prevents employees from ‘double dipping’ from receiving casual loading and paid leave entitlements.
6. Introduction to the Casual Employment Information Statement
Section 125B requires employers to give each casual employee the Casual Employment Information Statement (prepared by the Fair Work Ombudsman) before or as soon as practicable when starting their employment with the employer.