0:00
Hi there, my name is Andrew Koleda i’m the operations manager of On Demand HR and i’m here to provide an important update for our clients, associate members and other professionals on casual employees. The government has now passed legislation outlining changes to the Fair Work Act and how it affects casual employees. So let’s dive in and take a look at some of the most recent changes to the Fair Work Act.

Now these changes that we’re going to cover today include a definition of casual employees based on the original offer made to the employee and without taking into account any subsequent conduct of the parties. The obligation to offer casual conversion to a casual employee and the right for the employee to request casual conversion. A casual employment information sheet and the ability to make orders relating to casual loading amounts if an employee is found to have been in fact not a casual employee.

So under the new changes, a person is defined as a casual employee of an employer if an offer of employment is made by the employer to the person and 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 also that the person accepts the offer on that basis and the person is an employee as a result of that acceptance.

Now the changes go a little bit further in order to avoid confusion and they define no firm advanced commitment as only having regard to whether the employer can elect to offer work and whether the person can elect to accept or reject work. Whether the person will work only as required. Whether the employment is described as casual employment and 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 fair work instrument.

Now an important point is that the legislation states a regular pattern of hours does not mean that there is a firm advance commitment to continuing and indefinite work. So in summary, these changes now mean that a person is a casual employee if both the employer and the employee agree that the engagement is of a casual nature including some of the factors we spoke about earlier. This will hopefully provide some more confidence for business moving forward.

Now these recent changes also provide the obligation to offer casual conversion to a casual employee and casual employees also have the right to request casual conversion. Now by conversion, we’re talking about changing from casual to full time or part time employment. The obligations are that the employer must make an offer to the casual employee after 12 months if, the employee has worked a regular pattern consistent with either part time or full time employment for at least six of the past 12 months. Now this obligation does not exist however if the employer can reasonably expect a significant change in the hours or days that the employee is required or if it’s expected that the position will no longer exist in 12 months time. So following this, the employer obligation to offer casual conversion should the employee refuse the offer they can then make an additional request for conversion no earlier than 12 months following the refusal. The employer must respond to the request within 21 days of it being received with similar obligations and considerations as the initial offer for conversion.

Now whilst on paper, this might appear to be a win for casual employees the reality is actually that this type of conversion obligation already existed under many modern awards. Also many casuals do not choose to convert once they discover that it means that them going to need to forego their 25% casual loading in order for them to get access to leave and other entitlements. As part of the On Demand HR workplace relations review we find it best practice in terms of compliance to include conversion clauses within the employment agreement itself. We feel that this will continue to meet with our compliance obligations and requirements following this legislative change and also serves to eliminate the obligation to proactively reach out to employees in order to offer conversion as they reach 12 months of engagement.

Finally, following the widespread media coverage of the WorkPac vs Rossato decision in 2020, some changes have been made into the way that orders are issued relating to casual loading amounts. In the Rossato vs WorkPac case, which followed another decision against the same employer in Skene vs WorkPac it was ruled that even though the employees were engaged as casual employees, they were in effect full time employees. And as a result, WorkPac was ordered to backpay entitlements including annual leave, and sick leave. So without going to the specific details of these cases, they were the most extreme cases of full time employment being dressed up as casual employment. And this naturally sent the unions and employee advocates into a frenzy and businesses potentially scared of engaging casual employees for fear of being ordered to back pay entitlements in addition to the casual loadings that they were already paying.

This legislative change in addition to clearly defining casual employment, also seeks to address the issue of precedents set by the two WorkPac cases. So essentially, the legislation provides that should it be determined that an employee is engaged as a casual and accordingly paid a casual loading is afterwards ruled not to have been a casual employee but rather a full time or a part time employee, then any casual loadings paid to the employee in the past can then be used to offset any other leave and other entitlements that will be payable to a full time or a part time employee. So in simple terms, this clause effectively serves to stop the double dipping with employees on one hand, claiming that they were not casual employees, but on the other receiving casual loading payments.

So what if anything should businesses do in response to this legislation change? Well, from On Demand HR’s perspective, we would encourage businesses to do the following. Number one, ensure their casual employment contract clearly reflects the nature of casual employment. Number two, include a casual conversion clause in the employment contract. And number three, clearly demonstrate the payment of casual loading in both employment contracts and payslips.

Now, all of these considerations are included in On Demand HR’ standard Workplace Relations review, and we’d love to be able to help you out to not only ensure your casual contracts and entitlements and obligations under the new legislation is up to date, but also assist you in creating a strong foundation in your workplace relations for your business. So if this is something that you’re interested in exploring, please reach out to us at ondemandhr.com.au So thanks very much for your attention. I hope you found this information valuable. And once again, if you’ve got any questions or concerns please reach out to us at ondemandhr.com.au My name is Andrew Koleda, Operations Manager of On Demand HR and bye for now.