Important Changes to Casual Employee Laws Set to Go Ahead

On 7 December 2020, the Attorney General, Christian Porter, announced the government’s new Industrial Relations Omnibus Bill. On the 9th, it passed through Parliament. The bill aims to bring significant reform to industrial workplace legislation. One major change is to casual employee laws regarding the Fair Work Act 2009 (Cth) and the National Employment Standards. So how will it work?

Table of Contents

What are casual employees?

Casual employees are currently defined as having:

  • Hours of work (un-guaranteed)
  • Hours are usually irregular
  • No entitlements to sick or annual leave
  • An ability to leave employment without notice

However, the 2020 COVID-19 pandemic has highlighted inherent flaws in the current system. Namely, the lack of security that casual employees have (especially those who have been employed casually for a long time). These reforms aim to bring more certainty to casual employment, and more security in the workforce generally.

What are the changes?

1. New Definition of Casual Workers

Section 15A of the Bill will modify the Fair Work Act’s definition of casual employees; casual employees include individuals who have accepted work from an employer who has made ‘no firm advance commitment to continuing and indefinite work according to an agreed pattern of work’.

If enacted, casual employees will be able to access additional entitlements and rights.

2. Easier Conversion to Permanent Employment

After 12 months of employment, employers will have an obligation to convert casual employees to permanent employment (whether this be part-time or full-time, without a significant change in hours). This must happen if employees satisfy certain criteria, such as a regular work schedule for the 6 months prior. This is possible due to the Bill’s proposed addition of a new section (s66B) into the National Employment Standards. 

Employers can also refuse to do so, as long as they have reasonable grounds. If employees are not granted conversion after the first 12 months, they will also have the right to request casual-permanent conversion every 6 months thereafter. 

This change has the potential to improve job security because casual employees, by becoming permanent employees, can access entitlements such as paid personal leave (sick or carer’s) and pro rata annual leave.

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3. No Conversion to Fixed-Term Contracts

Through the Bill’s proposed addition of a Division 4A, employers cannot convert their casual employees to fixed term contracts. This change to casua employee laws appears to be a government attempt to stop employers giving employees temporary employment after working as a casual.

Reception

However, there are concerns that employees will use the legislation, if improperly worded, as a reason to fire employees before they reach the 12 month time frame in order to prevent requests for permanent work. Unions so far have rejected the bill as they believe the proposal does not help casual employees, in fact making them worse off. A representative from the Australian Council of Trade Unions, Secretary Sally Meus, echoed this sentiment; in her statement that unions need to be ‘ready to fight and defend the rights of workers’.       

Why is this change happening now?

At the beginning of the pandemic, more than 60% of job losses in Australia were casual workers. This makes casual employment one of the worst pandemic-impacted industries in Australia. With the continued uncertainty brought by COVID-19, the government wants to do more to improve job security and boost employment. 

The recent court case (WorkPac v Rossato) drew attention to the laws governing casual employment, and may also be another trigger for the law reform in industrial relations. In this case, the full federal court decided that casual employees could be entitled to more if they were in fact doing regular permanent work, essentially “double-dipping” in entitlements. While the decision is currently on appeal, it has a significant impact because employers could be liable for between 9 and 39 billion dollars.

What’s next?

The key takeaways from the bill are that in transforming casual employee laws, it redefines casual employees and modifies the casual-permanent employee conversion process. It could significantly improve job security for casuals by improving accessibility to permanent conversion. Though the bill passed through both houses of Parliament, it has not been enacted yet. Awaiting consultation and a focus committee, if enacted it should be finalised in 2021.  

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