The Federal Government has announced it will table its new IR omnibus Bill on Wednesday 9 December, which is set to include a number of changes for casual workers and those who employ them. With 2.3 million casual employees across Australia, this Bill will have widespread impact.

The key changes include:

  • A statutory definition of casual work being included in the Fair Work Act for the first time
  • Strengthening of the casual conversion process
  • Addressing double dipping for casuals deemed to be permanent

More detail is below, however please remember that this Bill is yet to be passed and will likely be changed through the normal political processes and as both industry groups and unions continue to lobby for their causes.

Definition of a Casual Worker

The Bill will introduce a statutory definition of casual employment into the Fair Work Act, defining a person as a casual employee if:

  • employment is offered, without any firm advance commitment that the work will continue indefinitely and follow an agreed pattern of work; and
  • the employee accepts the offer on that basis.

The meaning of “firm advance commitment” will be guided by specific factors, including whether:

  • the employee can elect to accept or reject work;
  • the employment is described as casual employment; and
  • the employee will be entitled to a casual loading or a specific rate of casual pay.

Strengthening the Casual Conversion Process

The bill will also contain a ‘strengthened process’ for regular casuals to convert to full-time or part-time employment, enhancing existing provisions.

Under the changes, an employer must make an offer for a casual employee to convert if:

  • the employee has worked for the employer for a period of 12 months, and has worked a regular pattern of hours on an ongoing basis for the past six months (previously 12 months); and
  • the employee could continue to work as a full-time or part-time employee without significant adjustment to their hours of work.

But an employer may decide not to make an offer or accept an employee request if they have reasonable grounds not to do so (consistent with the arrangements previously established by the Fair Work Commission).

The Bill also establishes that, if an employee declines an initial offer to convert, a further right to request will be available every six months, as long as they remain eligible.  This has previously been an unclear area and the question of ‘what if the employee opts not to convert to permanent’ is one which employers have struggled with when trying to meet their obligations, while reducing their risk of ‘double dipping’.

Addressing Double Dipping Risk

The Rossato v WorkPac ruling has been a thorn in the side of businesses employing casuals as it introduced the very real possibility of employees being able to ‘double dip’ on receiving the 25% casual loading and subsequently claim leave entitlements if deemed to be permanent.

The new Bill aims to introduce provisions allowing employers to offset any loadings or special rates paid against future claims for other benefits and this would apply to both past and future employees.

IT Minister, Christian Porter says “unless these reforms are made, every employer of regular casuals will continue to have a potential massive liability hanging over their heads”, making this a welcome reform for employers.

What Employers Should Do

While the Bill is going through the Senate, businesses need to ensure that they are compliant with current legislation and keep up to date on the amendments as they are released.  It is likely that these changes will impact on processes relating to casual employees including:

  • Contracts of Employment;
  • Casual Conversion processes; and
  • Practices for engaging and rostering casual employees.

For assistance with this and other IR/HR matters, please contact us.