New Laws, New Risks, Permanent Casuals, Double Dipping

Review Policies And Procedures Now!

Your burgeoning entrepreneurial business may rely heavily on temporary staff/casual employees due to the company’s age or due to previous seasonal trends. Recent changes mean your human resources policies and procedures need an update.

What Has Changed Regarding Workplace Rights And Obligations For Casual Employees?

In March, the Fair Work Act 2009 (FW Act) was amended to change workplace rights and obligations for casual employees, effective 27 March 2021.

To get your contract compliant, it is always advisable to use H.R. professionals.

The adjusted and new contracts will be affected by these material changes:

  • A clearer definition of casual employees in the Fair Work Act 2009 (Cth) (FWA) (thereby affecting entitlements in the National Employment Standards – NES);
  • Protection for business owners from casual employees who claim they were misclassified and qualify for permanent employment entitlements (double dipping);
  • Each casual employee must have sight of the new Casual Employment Information Statement (from employers);
  • Business owners have to offer eligible casuals conversion to permanent employment, and eligible casual employees can request it.

What Is The New Casual Employee Definition?

A person in your employ is considered ‘a casual’ if the following criteria are met:

  • They were offered employment with the clearly stated expectation, in writing, of “no firm advance commitment to continuing and indefinite work” basis;
  • The person accepts such an offer; and
  • The person is an employee as a result of that acceptance.

The classification of a casual status is now determined at the appointment time, which differs from historical court cases, which allowed for post-contractual determination.

A Court must now consider these factors when determining whether a firm advance commitment to continuing and indefinite work exists:

  • The employer can elect to offer work, and the person can elect to accept or reject work;
  • The person will work as required according to the needs of the employer;
  • The employment was clearly described as casual employment; and
  • The person was or was not entitled to a casual loading, or a specific rate of pay for casual employees, under the terms of the offer.

Double-dipping Mitigation

If an employee is misclassified as a casual, employers can offset any “relevant entitlements” owed to the employee against the 25% casual loading paid to casual employees, including:

  • Paid annual leave;
  • Paid personal/carer’s leave;
  • Paid compassionate leave;
  • Payment for absence on a public holiday;
  • Payment in lieu of notice of termination; and
  • Redundancy pay.

There must be an identifiable amount of casual loading paid to the employee to compensate for not having one or more relevant entitlements.

When Should You Offer A Casual Conversion?

You are now required to offer to convert a casual employee to full or part-time employment if they:

  • Have been employed with you for 12 months; and
  • Have worked a regular pattern of hours, on an ongoing basis, during the last six months,
  • And, without significant adjustment, the employee could continue to work as a full-time or a part-time employee.

You are not required to make an offer if there are “reasonable business grounds” not to do so.

These can include:

  • The employee’s position won’t exist within 12 months from deciding not to make the offer;
  • The work hours will materially reduce in that period;
  • The workdays and the work times will materially change;
  • And the employee is not available for those workdays and times;
  • Making the offer will contravene a recruitment or selection process required by the Commonwealth or State law.

Your notification to not offer a conversion must be within 21 days from the employee’s first 12 month employment period ending. It removes their conversion rights for the next six months, as does their refusal of a conversion offer.

To get your current status of employees correctly analysed, human resources policies and procedures updated, new contracts issued and a new contract template issued, contact Fresh HR Insights. We can work in-house or remotely and within your budget. Ph: 0452 471 960 or email: paulette@freshhrinsights.com.au.