Casual Employee Clarification

The Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2021 (the Bill) was recently passed by the House of Representatives and the Senate. The Bill is an attempt to address the uncertainty surrounding casual employees. Any business who engages casual employees will be affected by the passing of this Bill and will need to take action.

The practical result of the passing of the Bill for businesses is:

1. 1. Legally defining a ‘casual employee’.Where an employer offers an individual employment on the basis that there isno firm advance commitmentto continuing and indefinite work according to an agreed pattern of work for the individual and the individual accepts that offer, that individual will be classed as a casual employee of the employer.
    
   Practically speaking, for the engagement to be casual, it means that:

1. 1. an employer can elect to offer work and the employee can elect to accept or reject work;
2. 2. the employment is described as casual employment; and
3. 3. the employee is 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.

2. 2. Creating clear obligations regarding casual conversion.Under the Bill, the employer must offer casual conversion to an employee who has been in the employment of an employer for 12 months and during the last 6 months, at least, the employee has worked a regular pattern of hours, which without significant adjustment, could continue employment as a full-time or part-time employee (as the case may be). This obligation already exists in many Awards.
3. 3. The ability for employers to offset certain payments/entitlements where the employee was wrongly classified as a casual.To prevent any chance of ‘double dipping’, the Bill has introduced a requirement for Courts to reduce any accrued leave entitlements by an amount equal to the 25% casual loading paid. To avoid penalising the employee for what would usually be an employer’s mistake, this adjustment cannot reduce accrued leave entitlements below zero.4. The introduction of a ‘Casual Employment Information Statement’.

The Casual Employment Information Statement is to be provided to a casual employee as soon as reasonably practicable, and will contain information, among other things, regarding the meaning of casual employee under section 15A of the Fair Work Act and their rights regarding casual conversion. The Statement should provide some necessary relief to casuals who may be incorrectly classified or who are unjustly employed by their employers.
 
The Bill is a definitive and decisive leap forward for employers who can employee and engage with individuals on a casual basis knowing the Fair Work Act provides a much clearer concept of casual employment.
 
It is important that employment contracts are clear in the casual offering, and that payslips properly reflect payment of the casual loading.
 
If you would like further advice or wish to discuss any of the above in more detail and/or assistance in documenting employment contracts, please contact our Employment Team on (02) 4927 2900.