Changes to Casual Employment arrangements

Monday March 29, 2021

CASUAL EMPLOYEES – Important changes to Casual Employment

Background

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), the 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.

What should businesses do to implement the changes?

All businesses that employ casual workers should evaluate their recruitment processes, rostering patterns and implement regular reviews of casual employees. Some of these processes have been mandated through the changes, such as:
• offering eligible casual employees the right to convert to permanent employment, within prescribed timeframes. This offer must be in writing
• Compare casual employment hours and patterns of work with other permanent employees – in case of a dispute, this will become an important factor
• update onboarding processes to include Casual Employment Information Statement (not yet released by FWC)
• ensure all employees are provided with professionally drafted offers of employment to ensure clarity.
• Always refer to the employment award for clarity, paying above the award does not guarantee all Award conditions are being met.

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 before 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.
• The employee must respond to the employer’s offer. Lack of response is taken as the offer being declined

Staying informed
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.

Need help?

If you need help with a review of your current systems or would like help to implement the changes, please contact us at 02 8052 4144.

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