The Minister has announced the industrial relations omnibus bill to be introduced this week will provide for a statutory definition of ‘casual’ employment. Currently, the Fair Work Act 2009 (Cth) (the Act) does not define the term ‘casual employee’. The Act does, however, define ‘long term casual employee’, being an employee who ‘has been employed by the employer on a regular and systematic basis for a sequence of periods of employment during a period of at least 12 months’.  

The Minister argued that employers “are delaying making hiring decisions because of ongoing confusion about the legal status of casual employment”.

“Similarly, Australia’s 2.3 million casual employees need certainty about their work arrangements and entitlements.”

The proposed legislation will define a person as a casual employee if employment is offered and accepted without any firm advance commitment that the work will continue indefinitely and follow an agreed pattern of work.

The meaning of ‘firm advance commitment’ will be guided by specific factors, including:

• Whether the employee can elect to accept or reject work;
• Whether the employment is described as casual employment; and
• Whether the employee will be entitled to a 25% casual loading.

The new definition will apply to casuals from the date they commence their casual employment.

Casual conversion

The legislation will also provide that employers must offer permanent full time or part time work to eligible casuals after 12 months of employment, and six months of regular shifts. Workers will be permitted to decline the offer, but employers must make a new offer every six months, as long as eligibility is met.

An employer must make an offer to a casual employee to convert if

• the employee has worked for the employer for a year and worked a regular pattern of hours for the past six months (previously 12 months); and
• the employee could continue to work as a full or part time worker without significant change to their hours.

However, an employer may decide not to make an offer or accept a request if they have reasonable grounds. Reasonable grounds for not offering, or accepting a request to convert to permanent employment, includes were it would require a significant change to the workers’ hours or be unreasonable for the business.

Double dipping

In the wake of the Rossato decision, concern has existed that casual employees may be entitled to claim an underpayment for annual leave, and other entitlements of permanent employees, in circumstances where they have been paid a casual loading expressed to be in lieu of such entitlements. The Minister has claimed this Federal Court decision could cost business up to $39 billion in back pay.

To address this ‘double dipping’ the legislation will enable employers to offset amounts already paid through casual loadings against any claims to be paid for benefits such as sick leave or annual leave.

Other changes

The changes affecting casuals are just one part of the omnibus bill to be introduced this week, which will also cover enterprise bargaining, award simplification, compliance and enforcement and greenfield developments.