Casual employment shouldn’t be complex, but controversial recent legislative changes have introduced a minefield of technicalities that employers need to navigate.
For many businesses the changes will necessitate a reassessment of whether they can continue to engage casuals in the same way as they have in the past.
There are new restrictions on the circumstances in which a casual can be engaged and a new ‘employee choice pathway’ to permanent employment that replaces existing ‘casual conversion rules’ and is underpinned by a new capacity for eligible employees to obtain orders from the Fair Work Commission requiring that they be converted to full-time or part-time employment.
The obligations on employers to provide a ‘casual information statement’ have also changed. For many employers this will need to be given out more regularly.
The changes have also resulted in variations to modern awards and will mean that some employers should review the current terms of their enterprise agreements to ensure they are consistent with the new legislative scheme.
The changes were part of the Government’s ‘Closing Loopholes’ tranche of amendment to workplace laws which were strongly supported by the union movement.
While the Government made a number of important alterations to the amendments it initially proposed in response to calls from Ai Group and others, the changes are significant and will impact employers. For many, they will necessitate a change to existing practices and workforce structures.
The Fair Work Act now contains a notoriously complex definition of who can be a casual employee.
The new definition is set out over several pages of legislation and is intended to narrow the circumstances in which a worker can be engaged in this form of employment.
Central to determining whether someone is a casual or not will be the extent to which their employment is characterised by an "absence of a firm advance commitment to continuing and indefinite work".
The legislation now sets out a list of factors or ‘indicia’ that that must be considered in determining whether someone is casual.
Crucially, the legislation now require that it is the ‘real substance, practical reality and true nature of the employment relationship’ and the’ totality of the relationship’ that must be considered, not just the terms of an offer of employment or written contract. This a fundamental departure from the current law.
It is important that employers understand the significance of this change as there can be serious ramifications for inaccurately classifying an employee as a casual. This can include exposure to significant liability for underpayments and penalties for non-compliance with workplace laws.
There are measures that employers can take to minimise the risk of falling foul of the new requirements.
Existing casual conversion rules under the National Employment Standards will be replaced by the new ‘employee choice pathway’.
Eligible employees will be able to notify their employer in writing that they believe they are no longer casual employee under the new definition and wish to become full or part time.
A casual employee will be eligible to provide such a notice if:
The are transitional arrangements that apply to casual employees already engaged when the new laws commence.
Employers will need to follow strict requirements to consult with employees who seek conversion to permanent employment and ultimately respond in writing to them.
Employers will only be permitted to refuse requests for conversion to permanent employment on limited grounds.
The legislation give the Fair Work Commission new powers to deal with disputes over employee requests to be converted to permanent employment.
The most significant change is that such disputes can culminate in arbitration by the Fair Work Commission for the first time, with the Commission able to order employers to shift casuals into part-time or full-time employment.
Employers will be able to be represented in these proceedings by a registered employer association, such as Ai Group, but are otherwise only able to be represented in these matters by a lawyer if permission is granted by the Commission. This means that an employer may be left without the ability to have legal representation in these disputes.
Variations have also been made to award clauses dealing with casual employment in light of the legislative amendments.
Employers should also review their enterprise agreements to ensure that they are consistent with the new legislative rules related to casual employment. In some instances, it will be wise for employers to consider amending their agreements to ensure they align with the new legislative regime.
Ai Group had an unparalleled level of engagement with the Government and Parliament in connection with the development of the new laws relating to casual employment and will be at the forefront of its implementation.
As a registered employer association, our team of lawyers are also afforded special rights to represent members in proceedings in the Fair Work Commission.
We are uniquely placed to support employers of casuals to implement the changes to the law in this area
Ai Group members can:
Not a member? Request a call or get in touch on 1300 55 66 77.
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