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Changes to the Fair Work Act regarding Casual Employees

The Australian Government has recently passed changes to the Fair Work Act 2009 legislation regarding casual employees and it is anticipated will soon be enacted as legislation. The following is a brief summary of those changes. The full bill can be read here.

P&C Federation’s legal advisers, Warwick Ryan and Saascha Greeney at Hicksons Lawyers, have put together the following breakdown of these amendments.

Key changes 

  • Newly introduced definition of a ‘casual employee
  • Newly introduced casual conversion entitlements
  • The end of ‘double dipping’ for many employers

Background

Following the decision in WorkPac Pty Ltd v Rossato [2020] FCAFC 84 (Rossato Decision), many, casual employees in Australia were likely to have been categorised as permanent employees, on the basis that they:

  1. worked for their employer for 12 months or more;
  2. had predictable hours of work;
  3. had rosters and hours laid out in advance; and
  4. had an ongoing expectation of work.

As a result, these ‘casual employees’ were able to ‘double-dip’ and be entitled to both the 25% casual loading AND annual leave, personal/carer’s leave, and compassionate leave (Statutory Entitlements).

Enter the need for the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 (Omnibus Bill) which was introduced into the Federal Parliament late last year.

Ruling

On 18 March 2021, a slimmed down version of the Omnibus Bill was passed the Senate, and it is anticipated will soon be enacted as legislation.

The Omnibus Bill introduces several new clauses concerning casual employees into the Fair Work Act 2009 (Cth) (FW Act), including:

  • a definition of a casual employee (section 15A);
  • an offset clause, that permits employers who have misclassified permanent employees as casuals, to offset casual loading amounts previously paid to the employee against any claims made by the employee for Statutory Entitlements – thus ending the possibility of double dipping (section 545A)
  • an extension to casual employee’s rights, with employers now obligated to offer casual employees conversion to permanent employment in certain circumstances; and
  • a Casual Employment Information Statement, similar to the current Fair Work Information Statement, which employers will be required to provide to casual employees as soon as practicable after casuals commence employment.

Final Comment

Earlier last year the High Court of Australia granted labour hire company, WorkPac, special leave to appeal the Rossato Decision (HCoA Decision), and will be considering sometime this year:

  • what a genuine casual employee is; and
  • an order to prevent ‘double-dipping’, allowing employers to ‘set off’ any leave entitlements owed to casual employees against the paid casual loadings.

It is unknown what impact the HCoA Decision will have on the Omnibus Bill amendments, however, Hicksons will continue to monitor developments and will keep clients informed of changes as they come to hand.

Takeaway

Once the Bill is enacted employers will have to comply with any newly enacted sections of the Act, otherwise face potentially prohibitive penalties.

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