Proposed reforms to casual employment

The Australian Government recently introduced the Fair Work Amendment (Supporting Australia’s Job and Economic Recovery) Bill 2020 (the Bill) to Parliament.

If the Bill passes Parliament, it will enact various changes to casual employment, including the definition of a casual employee.

Many of the proposed changes have resulted from the recent cases of Workpac Pty Ltd v Skene [2018] FCAFC 131 and Workpac Pty Ltd v Rossato [2020] FCAFC 84 in which it was found that casual employees who work regular, consistent hours with a firm advance commitment to work, may be owed leave and redundancy pay even where they have received a 25% casual loading.

In light of the recent decisions, the Bill is intended to provide certainty to employees and employers regarding the rights and obligations of both parties.

The definition of a casual employee is proposed to be amended to where an offer of employment is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work.

Relevant factors to whether there is a firm advanced commitment to work include the ability to accept or reject work, whether the employee will work only as required and whether a casual loading is paid. The relevant time for assessing whether the employee is a casual employee will be at the time the engagement is entered into.

If the proposed changes become law, employers will also have the ability to set off any claim for annual leave, personal leave and redundancy pay against the 25% casual loading in an attempt to reduce the potential for “double dipping”.

The laws are proposed to work retrospectively to apply to current employees however it remains to be seen whether this will be valid.

The Bill also proposes changes to provisions regarding casual conversion, enterprise agreements, and flexible work directions.

At this stage, the Bill is a proposed law only and changes may occur prior to it coming into force. We recommend that employers continue to look for updates and be aware that substantial changes may be on the horizon.

We recommend that you contact a lawyer to seek advice regarding your particular situation if you are having employment issues. This article is for informational purposes only and does not constitute legal advice.