Employment & Safety Update – 10 February 2021

Proposed amendment to the Fair Work Act set to define ‘casual employee’

 

Introduction

The Australian industrial relations system is set to receive a substantial reform, in the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 (the Omnibus Bill).

One aspect of the Omnibus Bill is the inclusion of a definition of ‘casual employee’ and statutory right to request ‘casual conversion’ in some circumstances.

What is casual employment?

Currently, ‘casual employment’ is not defined in Federal legislation, and Courts will always look at the underlying facts to decide whether a person is truly a ‘casual’ employee.

In WorkPac Pty Ltd v Rossato, the Full Court of the Federal Court reaffirmed that the absence of a ‘firm advance commitment’ of employment will be a primary consideration in determining whether a person is a casual employee.

The Omnibus Bill draws heavily from the common law definition adopted in Rossato.

It proposes to define a casual employee as a person:

  • who is offered work with no firm advance commitment to continuing and indefinite work according to an agreed pattern of work;
  • who accepts the offer of work on that basis, and
  • who is employed as a result of that acceptance.

The Omnibus Bill includes factors that must be considered at the time the offer was made, which are:

  • whether the employer can elect to offer work and whether the person can elect to accept or reject work;
  • whether the person will work only as required;
  • whether the employment is described as casual employment; and
  • 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 Omnibus Bill also includes provision that will require employees to offer permanent employment to casual employees after 12 months (with some retrospective operation).

Potential issues?

The absence of a statutory definition of casual employment has challenged employers, employees and Courts. However, the proposed definition is not likely to resolve the disputes.

One issue is that an assessment of whether a person is a casual employee is to be conducted at the time the offer of employment is made. The proposed definition leans towards a ‘form-over-substance’ approach in determining whether a person is a casual employee or which essentially reverses the current position.

As such, the definition may not avoid arguments that arise where there is a “casual” relationship initially, but which develops into a role that has features of the ‘firm advance commitment’.

This seems likely to be subject to litigation where the nature of employment evolves over time, and disputes arise regarding the entitlement to be offered ‘casual conversion’.

Conclusion

Despite the proposed changes, for now it is important to note that employers should ensure the nature of the relationship is clearly defined from the beginning of the employment relationship. Employers should still actively review employment arrangements and where appropriate revisit contracts of employment to ensure the agreement accurately reflect both parties’ understanding.

We will review other aspects of the Omnibus Bill in coming weeks for inclusion in these updates.

If you have any queries or would like further information regarding this update, please contact:

Brett Cassidy
Principal
M: 0438 368 053
E: bcassidy@pageseager.com.au

Joe Mullavey
Senior Associate
M: 0416 794 061
E: jmullavey@pageseager.com.au

Caleb Devine
Lawyer
T: (03) 6235 5125
E: cdevine@pageseager.com.au

Published: 10 February 2021

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