On 26 March, 2021, the federal Government’s Fair Work Amendment (Supporting Australian’s Job and Economic Recovery) Bill 2021 (the ‘Bill’) became law and associated amendments to the Fair Work Act 2009 (‘the FW Act’) took effect. These amendments are detailed below:
1. ‘CASUAL EMPLOYEE’ DEFINED
The FW Act now contains the following casual definition in section 15A:
- A person is a casual employee of an employer if: (a) an offer of employment made by the employer to the person is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person; and
(b) the person accepts the offer on that basis; and
(c) the person is an employee as a result of that acceptance.
2. For the purposes of subsection (1), in determining whether, at the time the offer is made, the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person, regard must be had only to the following considerations:
(a) whether the employer can elect to offer work and whether the person can elect to accept or reject work;
(b) whether the person will work as required according to the needs of the employer;
(c) whether the employment is described as casual employment;
(d) whether the person 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.
Note: Under Division 4A of Part 2‑2, a casual employee who has worked for an employer for at least 12 months and has, during at least the last 6 months of that time, worked a regular pattern of hours on an ongoing basis may be entitled to be offered, or request, conversion to full‑time employment or part‑time employment.
3. To avoid doubt, a regular pattern of hours does not of itself indicate a firm advance commitment to continuing and indefinite work according to an agreed pattern of work.
4. To avoid doubt, the question of whether a person is a casual employee of an employer is to be assessed on the basis of the offer of employment and the acceptance of that offer, not on the basis of any subsequent conduct of either party.
5. A person who commences employment as a result of acceptance of an offer of employment in accordance with subsection (1) remains a casual employee of the employer until:
(a) the employee’s employment is converted to full‑time or part‑time employment under Division 4A of Part 2‑2; or
(b) the employee accepts an alternative offer of employment (other than as a casual employee) by the employer and commences work on that basis.
What Does This Mean?
If required to determine whether an employee was a genuine casual employee (and not misclassified as one), the courts must assess the employment relationship based on the circumstances at the time of the offer of employment, and its acceptance. Further, when considering section 15A(2) of the FW Act, the circumstances listed in that subsection are the only circumstances that a court can take into account when looking to whether an employer made a firm advance commitment.
2. CASUAL LOADING OFFSET
A new provision contained in section 545A of the FW Act allows an employer to offset the value of any casual loading paid against a finding by a court that an employee was not a casual employee and was therefore entitled to paid leave. The casual loading must be identifiable as a payment made in lieu of entitlements payable to a permanent employee.
3. OBLIGATION TO OFFER CASUAL EMPLOYEES CONVERSION TO PERMANENCY
An employer will now be required to offer a casual employee conversion to permanent full or part-time employment if:
- The employer is not a small business employer (the obligation to offer conversion does not apply to small business employers, being those with less than 15 employees); and
- The casual employee has been employed on a casual basis for at least 12 months; and
- Has worked on a regular and systematic basis (i.e. had a regular pattern of hours, without significant adjustment) for the last 6 months of that 12 month period; and
- Could continue to work their regular hours on a permanent basis without significant changes.
The offer must be made in writing within 21 days of the employee having attained 12 months of casual service. The obligation to offer conversion applies regardless of what an industrial instrument such as a modern award or Registered Agreement provides.
There is a transition period for existing casual employees. Employers have to assess whether to make an offer before 27 September 2021 or 21 days after the 12-month anniversary of an employee, whichever date occurs later. Employers must advise existing casual employees employed at 27 March 2021 that are not eligible at 27 September 2021 in writing that they are not eligible within 21 days of making that assessment.
An employer does not have to make the offer of conversion if an employee is not eligible (per the dot points above) or if there are reasonable grounds not to. An employer has to inform the employee of this in writing.
Section 66C(2) of the FW Act clarifies circumstances that may constitute reasonable grounds for this purpose. Importantly, casual employees who are not eligible may, subject to section 66F of the FW Act, still have a ‘residual right to request casual conversion’.
4. CASUAL EMPLOYMENT INFORMATION STATEMENT
Employers are now required to provide all new casual employees with a copy of the Casual Employment Information Statement as soon as possible. The existing requirement to provide the Fair Work Information Statement to all new employees is still applicable.
For existing casual employees, a copy of the statement should also be provided to them as soon as is practical.
A copy of the new Statement for casual employees can be downloaded from HERE.
5. SMALL CLAIMS PROCEDURE FOR CASUAL EMPLOYEES
The Bill has amended the FW Act to include a new subsection to existing section 548. This new subsection enables a small claims proceeding to be commenced in the magistrates or Federal Circuit Court.
Such a proceeding can be commenced in relation to disputes regarding casual conversion only (i.e. disputes arising from an employer’s failure to or refusal to offer conversion to permanency on the basis of the prescribed criteria) and they cannot be for the purposes of seeking a pecuniary penalty.
HOW CAN THE QHA HELP?
A new fact sheet on casual conversion requirements will be available shortly.
QHA’s employment relations team has always recommended employment contracts for all employees, including casuals.
An employment contract is a great way to confirm employment arrangements, in particular, to confirm that casual employment has been offered in a manner that is consistent with the new casual definition.
The QHA’s HR Manual contains a casual employment contract template that can be adapted and adopted into hospitality workplaces. As a result of the amendments listed at points 1 and 2 in this article, the casual template now includes:
- A detailed definition of what casual employment is – taking into account the new definition in the Act, and;
- A specific casual offset clause – that reflects the approach a court should take when assessing how the casual loading can be used to determine offset amounts.
The QHA’s HR Manual is available at a cost of $300 (QHA member rate), and can be ordered from HERE.
HR Manual Subscribers: Members who have subscribed to the HR Manual for 2021 will have already received an email with the updated letters of appointment templates. If you have not, please contact us so we can check this for you.
QHA members seeking more information or wishing to discuss a specific employment relations matter are encouraged to contact the Employment Relations Department for a confidential discussion by calling (07) 3221 6999 or emailing firstname.lastname@example.org.