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Casual employment reforms made to the Fair Work Act 2009 (Cth)

26 March 2021
Despite major changes being proposed late last year, it appears the Australian workplace relations regime is in for a less substantial shift than originally expected. In this article, we will provide an outline of the key changes to the Fair Work Act 2009 (Cth) and what they mean for Australian employers.

On Monday 22 March 2021, the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2021 (the Bill) was passed by both Houses of Parliament, despite significant amendments made in the Senate prior.
The original Bill introduced in December 2020 proposed major changes to the Better Off Overall Test (BOOT), the simplification of the Modern Award system, and suggested streamlining the agreement-making and approval process of enterprise agreements, to name a few. Instead, the only provisions that remained in the Bill post-Senate negotiation, are those relating to casual employment.

Relevant amendments to the Fair Work Act 2009 (Cth)

Casual Employees
As anticipated, section 15A of the Bill will insert a new definition of "casual employee" into the Fair Work Act 2009 (Cth). A 'casual employee' will be defined as:

 "a person who has accepted an offer of employment on the basis that the employer has made no firm advance commitment to continuing and indefinite work according to an agreed pattern of work". 

To avoid doubt, the amendments indicate that the assessment of whether a person is a 'casual employee' is to be on the basis of the employment offer and acceptance of such offer (whether there was a "firm advance commitment" provided), rather than on the basis of conduct by either party or a regular pattern of hours only. 

Casual Conversion
The Bill also seeks to deter employers from changing or varying an employment relationship in order to avoid casual conversion obligations. The insertion of section 66B will amend the National Employment Standards (NES), requiring employers to provide an offer of conversion to casual employees to either full-time or part-time employees, in situations where:

  • the employee has been employed for a period of 12 months; and
  • the employee has, for at least 6 months of that period, worked a regular pattern of hours on an ongoing basis. 

Only in circumstances where employers have reasonable grounds based on facts that are known or reasonably foreseeable, will employers be able to refuse a request or not provide a conversion offer to eligible employees. The Bill provides listed examples for clarification in determining what may constitute "reasonable grounds".  The provisions also enable the Fair Work Commission to deal with small disputes relating to casual conversions, where discussions cannot be resolved at the workplace level. 

It is important to note that this conversion mechanism is not a requirement for employers that are a small business employer (less than 15 employees).

Additionally, casual employees will have a residual right to request a conversion from their employers under similar circumstances. 

Minimising 'Double Dipping' Opportunities
Following the landmark ruling in Workpac Pty Ltd v Rossato [2020] FCAFC 84, which effectively exposed businesses to the prospect of owing significant amounts of money to casual employees, the Bill also includes offset provisions to protect employers against underpayment liability. 

Where it is deemed that during an employment period a person was not a casual employee and a claim is made for unpaid entitlements, the offset rule requires a court to reduce any amount payable by the employer to the person, by an amount equal to the casual loading the person received. 

Information Statement

Finally, under the Bill, both existing and newly employed casual employees are to be provided with a copy of the Fair Work Ombudsman's 'Casual Employment Information Statement' before, or as soon as practicable after, commencement as a casual employee.  

If you require further information or have any queries in relation to this legal update, please contact Matthew Smith or Mason Fettell.

We would like to acknowledge the contribution of Ashleigh O'Connor to this article. 

Further Reading