In 2021, the law continues to quickly adapt around this topic, so it’s time for an update.
As a business owner, it is important that you are up to date with the law around casual workers.
Let’s break it down.
Why All The Fuss? A Quick Re-Cap
In May 2020, the Court held in the case of Workpac v Rossato that if a casual employee works regular and systematic hours with ‘predictable periods of working time,’ they are entitled to:
- Personal leave
- Compassionate leave
- Public holiday payments
The Court held that if a casual employee’s nature of work is similar – if not identical – to that of a permanent employee, leave entitlements should be honoured.
Here, it was determined that focus should not be on the label of your ‘casual’ worker but rather on the objective nature of their job.
The ultimate intention of this decision is that ‘casual’ workers who work regular and systematic hours will be awarded with the security and entitlements that come with permanent work.
Since the Federal Court’s decision, Workpac has applied for, and has been granted, special leave to appeal the Federal Court’s decision in the High Court of Australia.
When appealing to the High Court, it is expected that Workpac will argue that the Federal Court erred in its decision as it allows casual employees to ‘double dip.’ What Workpac means by this is that the Federal Court’s ruling will allow casual workers who work regular and systematic hours to receive both casual loading and leave entitlements.
The High Court is not expected to hand down its judgement in regard to the Rossato case until mid 2021. As such, it is important you understand the current law and how it may impact your business.
The Current Law
At present, Fair Work Australia states that a casual employee:
- Has no guaranteed hours of work
- Usually works irregular hours
- Doesn’t get paid sick or annual leave
- Can end their employment without notice
- This is unless notice is required by a registered agreement, award or employment contract.
Currently, casual workers are entitled to:
- ‘Casual loading’
- This is a higher rate than part-time and full-time workers receive, because casual workers are not entitled to benefits such as sick leave and annual leave
- 2 days’ unpaid carer’s leave
- 2 days’ unpaid compassionate leave per occasion
- 5 days’ unpaid family and domestic violence leave (in a 12 month period)
- Unpaid community service leave.
All of the above is the current law. This is what currently applies to your business and its casual employees.
Let’s go into some more detail.
Reforms To The Fair Work Act 2009 (Cth)
In late 2020, the Federal Government handed down the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020.
The Bill states that a person is a casual employee of an employer if:
- The employer makes no firm advance commitment to continuing and indefinite work for the person.
The Bill details in s 66B(1) that ‘casual employees’ have a right to ‘casual conversion.’
What Is The Right To Casual Conversion?
‘Casual conversion’ is where the ‘casual’ employee has a choice to convert to a permanent work status (such as a full/part time employee) if they have worked a regular pattern of hours on an ongoing basis for 12 months.
S 66B(1) says:
An employer must make an offer of part-time or full-time employment to a casual employee if:
- The employee has been employed for a period of 12 months
- During at least the last 6 months of that period, the employee has worked a regular pattern of hours on an ongoing basis.
Are There Any Exceptions?
In accordance with s 66C of the bill, if there are ‘reasonable grounds’ for not making an offer, then it is not required to be made.
‘Reasonable grounds’ include:
- If the employee’s position will cease to exist in the 12 months after not making the offer
- If the employees hours of work are expected to significantly reduce in that period
- The employees work days and hours will significantly change during that period
- Making the offer would not comply with a recruitment selection process required by law
This means that the Bill expects employers to assess what the next 12 months of the employees employment will entail and determine if any exceptions apply to preclude the offering of permanent work.
The Bill avoids the risk of casual workers ‘double dipping.’ The reason being is that it allows employers to off-set any paid casual loading against future claims for permanent benefits.
As this is a Bill, it is not yet enforceable legislation. The legislation is expected to be voted on in mid-2021. Until then, the current law mentioned above still applies.
Summary Of Proposed Reforms
- ‘Casual’ workers who work a regular pattern of hours on an ongoing basis for 12 months will be presented with the choice to engage permanent work (part-time or full time) by their employer.
- This choice is also known as the ‘casual conversion right’ whereby your employee has the opportunity to convert from a casual employee to a part time or full time employee. This is a result of working a regular pattern of hours on an ongoing basis for 12 months.
- If your employee decides to take up the permanent role, they will be afforded leave entitlements and other benefits that come with part time or full time work.
- S 66C allows for exceptions to the ‘casual conversion right’, balancing the interests of both you as the employer and your employee.
- The Bill avoids risk around ‘double dipping’ allowing employees to off-set any paid casual loadings against future claims for permanent benefits.
- The Bill is yet to be converted into enforceable legislation, this is expected to occur in mid 2021.
- The ruling of the High Court in the Rossato case is yet to be handed down and may potentially impact the law.
With the Rossato case yet to be determined in the High Court and the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 yet to be voted in as legislation, there is still a lot up in the air.
However, what we do know is that the near future is likely to see changes to casual worker laws, specifically for casual workers who work regular and systematic hours on an ongoing basis.
It is important that you and your business are prepared to implement and abide by the above as it may be the law in the coming months.
It could be a good idea to review your current casual workers working hours to ascertain which employees may fall into the category of obtaining the ‘casual conversion right.’
As a business owner, it is imperative that you keep up to date with the law governing your casual employees. You can subscribe to our newsletter here.
Alternatively, if you have any questions, you can reach out to our team for a free, no-obligations chat at firstname.lastname@example.org or 1800 730 617.
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