The newly elected Federal labor government has signaled their intent to roll back some of the changes introduced by the previous government relating to casual employment.  Today, we are going to unpack these proposed changes and consider the potential implications for business.

Over the past few years there were two high profile cases which created serious concern in the business community being Skene vs WorkPac vs Rossato vs WorkPac.  The specific concern in the business community was that long term casual employees in both these cases were awarded backpay of entitlements including annual and sick leave.

We have shared several posts on our website at ondemandhr.com.au breaking down the details of these cases, however the essence is that these cases were fairly extreme examples of full time employment dresses up as casual employment, however WorkPac did claim that it had paid casual rates to compensate for permanent leave entitlements.  Following this, the Liberal government made changes to the Fair Work Act regarding the definition of casual employment to provide certainty to businesses who engage casual employees, that they would not be caught up in backpaying entitlements, as it occurred in these cases.

Previously, the definition of casual employment was handled by common law taking into account an analysis of the overall circumstances of the employment. In other words, if a casual employee “looks” like a full time or part time employee then they are a full time or part time employee.  It is this definition that the Federal Labor government is seeking to return to in what appears to be an attempt to deliver on one of their core election promises to deliver more secure work for employees.

The funny thing is from our real world experience in offering casual employees the choice to covert to full time or part time employment, they rarely choose to take this up once they find out they will need to sacrifice their 25% loading in order the get more “secure” employment as well as access to annual and personal leave.

We have done a comprehensive video on the current legislative definition of casual employment which we have linked, however the essence of it is that if the employer and the employee agree that the employment is casual then the employment is casual.  

So this leaves the question to be what should businesses do in order to prepare for the proposed changes to casual employment?  The good news is that the current legislation brought with it some increase compliance obligations including:

• Specific casual employment clauses to be included in employment agreements to acknowledge that the employment was casual in nature
• The inclusion of a casual employment information statement compiled by the Fair Work Ombudsman to be provided to the employee at the commencement of their employment
• Inclusion of a detailed breakdown as a separate line item of the casual loading to be included on the employees payslip
• Changes in the requirements to offer casual conversion.

Many businesses have already implemented these changes as part of their current compliance obligations which should put them in a good place to adapt to the impending changes by the Federal labor government.  However if your business has some questions or concerns, please do not hesitate to reach out to the team here at On Demand HR.