In the last few years the Federal Government has been carefully considering the current employment climate particularly with respect to the high numbers of casual employees. The COVID-19 pandemic cast a spotlight upon the casual employee sector. A sector in which 1.35 million of the 2.6 million casual employees had in fact worked regular shifts for their employer for a period of 12 months or more. When the Federal Government sat for the last time in 2020, the Fair Work Amendment (Right to Request Casual Conversion) Bill 2019 was introduced. Whilst this proposed legislation is not yet law, it signifies a strong intent for an overhaul.
In summary, these proposed changes seek to strengthen casual employees rights with respect to ongoing employment in an effort to deliver more fair and equitable outcomes for workers. These changes could also limit employer’s liability to pay casual leave loadings and other benefits in response to the ‘double dipping’ problem created by the recent federal court. That decision ruled some casual employees could claim both annual leave and casual loadings.
What is a Legal Definition of a Casual Employee?
Currently, the Fair Work Act does not provide a definition of ‘casual work’. Our current understanding of what a casual employee is comes from decisions made by the Courts.
The proposed legislative changes offer a definition of ‘casual employment’ to be enshrined in the Fair Work Act and declare casual employment to be the offering to someone of work ‘without firm advance commitment’ of ongoing opportunities. Regard will also be had to an employee’s ability to reject work or receive casual loading.
Where employees meet the specific requirements to be determined a ‘casual’ they will become entitled to seek a conversion of their employment in particular circumstances. Casual conversion essentially involves that, where a casual employee is not engaged to preform work on an irregular, occasional or non-systematic basis for a specified period of time, they have the right to elect to have their contract of employment converted to full-time or part time employment if the employment is to continue beyond the conversation process.
Many enterprise agreements and industry awards already provide for casual conversion with varying requirements employees must meet to qualify. The purpose is to secure a more stable work environment and prevent long term casual employment. Although, concerns have been raised that this may in fact entrench casual work if employers do not properly engage in conversion discussions or create a more volatile short-term casual employment. A situation whereby employers terminate employment prior to the time frame being reached.
The proposal before parliament seeks to amend the law. This is to provide casual conversion irrespective of any enterprise agreement or award. This legislation does not intend to disturb the current arrangements within the current awards. However, it will provide a safety net right to request conversion and provides a mechanism to allow this to happen.
What to do if you are a Business Owner
The impact of the above is that businesses need to be careful as to how they approach casual employment. They need to ensure that these arrangements are genuine irregular casual employment arrangements within the legislation (if passed) or the applicable Award. If not, you risk employees converting their employment status or otherwise making claims for certain entitlements.
Every business and industry is different and often advice concerning these issues needs to be tailored. This is to specifically address the needs and circumstances of each particular business. If you have concerns about your employees and their employment status, we are able to assist you. Contact Amelia Hatton or Heath Adams on (02) 4721 6200.
Written by Amelia Hatton.