Significant changes are on the way with respect to casual employment in Australia.

On 22 March 2021, the House of Representatives passed a narrower version of the Government’s newly introduced overhaul of the Fair Work Act 2009 ; namely, the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2021 (the Amendment Bill).

The Amendment Bill had been significantly amended by the Senate with support of Government Senators after it became clear that the Government could not get support from a sufficient number of Senators to pass all seven amending schedules of the Bill, with only Schedule 1 surviving. The removed Schedules detailed tougher penalties for wage theft, including criminal penalties as well as amendments to Greenfields agreements, enterprise bargaining and hours of work for part-time employees.

Despite this, the changes introduced by Schedule 1 are significant for the industrial relations legislative landscape. They are intended to more precisely define who is a casual employee, and  provide protection against double-dipping claims by longstanding casual employees and a scheme for casual conversion to permanent employment status.   

Changes to Casual Employment

The amendments in Schedule 1 of the Amendment Bill largely come as a result of the decision of Workpac Pty Ltd v Rossato [2020] FCAFC 84, which determined that workers who complete ‘regular, certain, continuing, constant and predictable’ shifts should be entitled to receive the benefits and entitlements that full-time workers receive.

One of the key amendments in Schedule 1 is to introduce a new statutory definition of what constitutes a ‘casual employee’. In this respect, the Amendment Bill inserted section 15A to define casual employees as workers who have:

1. Firstly, received an offer of employment on the basis that their ‘employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work’ for them, and
2. Secondly, accepted the employer’s offer on that basis and as a result, become an employee. 

Importantly, the Amendment Bill provides that in deciding whether or not an employee is casual, it is the original offer and acceptance of employment that will be taken into account and not any subsequent conduct of the employer and employee.

The Amendment Bill also provides the following exhaustive list of factors that must be taken into account in determining whether, at the time the employer makes an offer, the employer made no firm advance commitment to continuing and indefinite work according to an agreed pattern of work:

1. Whether the employer can elect to offer work and whether the worker can elect to accept or reject work;
2. Whether the worker will work only as required;
3. Whether the employment is described as casual employment; and
4. 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 a fair work instrument.

The Amendment Bill also compels employers to offer current casual employees conversion to full-time or part-time employment where they have worked for their employer for at least 12 months and have, during at least the last 6 months of that time, worked a regular pattern of hours on an ongoing basis.

However, this entitlement is subject to an exemption; namely, where reasonable grounds exist for the employer to not make the offer and the reasonable grounds are based on facts that are known, or reasonably foreseeable, at the time of deciding not to make the offer. In order to determine whether reasonable grounds exist to not make the offer, the Amendment Bill provides another list of indicia, including but not limited to the following factors:

1. Whether the employee’s position will cease to exist in the period of 12 months after the time of deciding not to make the offer; and
2. Whether the hours of work which the employee is required to perform will be significantly reduced in that period.

The Amendment Bill also provides a residual right for current casual employees to request casual conversion to full-time or part-time employment where section 66F(1) is satisfied, which includes but is not limited to the following criteria:

1. The employee has been employed by the employer for at least 12 months; and
2. The employee has, in the period of 6 months ending the day the request is given, worked a regular pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to work as a full-time or part-time employee.

Where a casual employee has accepted an offer of permanent employment or the employer has granted the request for casual conversion to permanent employment, the employer must within 21 days after the day the request is accepted by the employee or is given to the employer, give written notice to the employee of whether they will be converting to full-time or part-time employment, their hours of work after the conversion takes place and the day the conversion will take effect.

Other salient changes introduced by the Amendment Bill include the following:

1. The provision of a dispute resolution process regarding disputes about offers and requests for casual conversion. In particular, it notes that disputes must be firstly resolved at the workplace level, by way of discussions between the parties. If workplace discussions do not resolve, application can subsequently be made to the Fair Work Commission.
2. The provision of a dispute resolution process regarding disputes about offers and requests for casual conversion. In particular, it notes that disputes must be firstly resolved at the workplace level, by way of discussions between the parties. If workplace discussions do not resolve, application can subsequently be made to the Fair Work Commission.
3. Section 125B makes it mandatory for employers to provide new casual employees the Casual Employment Information Statement which is being created by The Fair Work Ombudsman.
4. Section 545A provides amendments to court orders that are made in relation to off-sets for casual loadings that have been already paid to casual employees to prevent employees from receiving casual loading as well as claiming paid leave. In effect, this will provide protection against ‘double-dipping’ entitlement claims by longstanding casuals.

The Amendment Bill has been passed by both houses and it now awaits assent by the Governor-General. The changes brought through in Schedule 1 amount to an important change for workplace laws going forward and will likely have a discernible effect Australia’s employment landscape in relation to casual employment.