As the Government takes steps to redefine casual employment in the Fair Work Act, Rolf Howard, Managing Partner, Owen Hodge Lawyers, discusses how this will impact employers and what they can expect.
In a move designed to protect the 2.6 million casual employees in Australia who were particularly vulnerable throughout the COVID-19 economic crisis, the Government is taking steps to redefine casual employment in the Fair Work Act.
It’s expected that around half of all casual workers in Australia actually work regular shifts and are employed by the same employer for 12 months or more. Even though their working conditions resemble those of permanent employees, they are deprived of sick leave, holiday pay and other benefits as well as the security that comes with being employed on a permanent basis. Under the proposed changes these employees would be offered permanent employment.
Who will be considered a casual employee?
It’s expected the definition of casual employment will reflect what the Courts have previously confirmed in prior legal cases - that a casual employee is one that has no firm advance commitment to work. This generally means that the casual employee provides their services in response to demand, with irregular work patterns due to the unpredictability of the type of work.
Whether it can be confirmed that there is no firm advance commitment to work will depend on whether the employee has the flexibility to accept or reject work, how employment is defined under the contract and whether the employee will be entitled to receive a 25 per cent casual loading.
The proposed changes would also include a simpler process under awards for employers to pay loaded rates as well as criminal charges for employers who knowingly underpay workers.
What does this mean for employers?
It’s hoped the changes will make it easier for employers to employ genuine casual workers, while preventing them from exploiting those who by right should be employed on a permanent basis.
The Bill which proposes these changes is currently with the Senate. If it passes, employers should be ready to reclassify employees as required, ensure that all employees are receiving the correct benefits and take steps to ensure contracts expressly state when an employee is employed on a casual basis.