Amendments to Casual Employment
The Senate has passed a section of the upcoming Industrial Relations Bill, relating to Casual employment. These changes alter some key principles around casual employment and will have an impact on small businesses that employ casual employees.
What is changing?
The legislation now provides a clearer definition of ‘Casual Employment’ along with specific processes for Casual conversion that employers and employees will be required to follow.
A casual employee is one who:
- does not have any firm advance commitment to continuing and indefinite work according to an agreed pattern of work
- accepts the offer on that basis and is an employee on that basis
- can elect to accept or reject work;
- will work as per fluctuating needs of the employer;
- will be entitled to a casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument.
The person remains a casual employee until:
- The employee’s employment is converted to permanent employment or;
- The employee accepts an alternate offer other than casual) by the employer and commences work on that basis
The new definition raises the focus on the offer of employment, the substance of the relationship and the Agreement made upon commencement. Ideally, this must be in the form of a written Agreement to avoid disputes.
What does this mean for Employers?
Employers should urgently review the true nature of the work being performed as below:
- Is the relationship continuous? If over 12 months (6 months for some Awards), employee may be entitled to an offer of casual conversion.
- Are the hours of work constant? eg is there a regular work pattern of work without significant adjustment.
- Is there a written Agreement in place? Verbal employment arrangements can lead to discrepancies and differences in understanding. The only way to avoid this is via a written agreement.
- Evaluate recruitment processes, rostering patterns and implement regular reviews of casual employees. New processes must include:
- offering eligible casual employees the right to convert to permanent employment, within prescribed timeframes. This offer must be in writing.
- Comparison of casual employment hours and patterns of work with other permanent employees
- updating onboarding processes to include Casual Employment Information Statement,
ensuring professionally drafted offers of employment are provided to casual employees to ensure compliance with the new Bill
- applicable award conditions are being met.
This assessment should look into the substance of the arrangement and not how it is described in the contract.
Some protections for employers include:
- No double dipping – if an employee has been misclassified, subject to evidence they may not be able to claim historic entitlements that have been offset using casual loading.
- Small claims procedures and some flexibility with dealing with disputes internally prior to the matter being referred to Fair Work.
- In some circumstances, the employer may not be required to make the offer of casual conversion. If this applies, the employee must be notified in writing.
- Employee must respond to employer’s offer. Lack of response is taken as the offer being declined
The Fair work website is a good resource to stay in touch with developments on this issue.
You can also register your interest in receiving regular updates by contacting us and requesting a newsletter.
Keeping up with employment law and award changes and your obligations under the Fair Work Act can be tricky and seeking expert advice can assist you to stay on the right side of the law. If you need help ensuring you’re on top of your obligations, contact Meena Silk at 08 6115 6324.
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