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Insights Paper | IR Alert - Changes to Casual Employment

MARCH 2021

Following a period of protracted debate, the Commonwealth Parliament has finally passed the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 (the Bill), albeit in substantially reduced form.

The significantly streamlined Bill will have the effect that:

  • The FW Act will contain a (somewhat lengthy) definition of a “casual employee”. The absence of a statutory definition of “casual employee” has led to significant disputation in the past. It is very important that all employers familiarise themselves with the new statutory definition.
  • The FW Act will extend the right to request casual conversion (to permanency) to all casual employees; not just those covered by certain modern awards or enterprise agreement (as was previously the case). Again, it is important that employers familiarise themselves with this provision, particularly:

    > when a casual employee can request conversion to permanency;

    > when an employer can refuse such a request (or be required to grant a request); and

    > what occurs in the case of a dispute between the casual employee and the employer.

  • The FW Act will permit a Court to offset (or allocate) a casual loading paid to an employee towards any amount an employee alleges or claims are owed for traditionally “permanent” entitlements like paid leave. This is a result of the controversial Workpac decision, which is awaiting hearing by the High Court of Australia.

The changes will not be without controversy. Although the clarity provided by the definition of “casual” is a welcome development for many, the expanded right of casual conversion (and its increasingly complex rules) may give rise to further uncertainty for both employees and employers.

Interestingly, in the last 24 hours, public comment has queried the “constitutionality” of the Bill, largely because the Bill purports to have retrospective application. It remains to be seen whether a constitutional challenge occurs and/or whether it would be successful. Although retrospective legislation is largely unheard of in employment law, it is not without precedent in a general sense; taxation law being a common example.

It is not yet clear when these changes will commence. In the interim, if you have any questions about this alert or what the Bill means for your casual workforce, please contact a member of our team.

*This alert is only relevant to employers in the private sector, Victoria and the Commonwealth. These changes will not be applicable to Local and State Government in most States and Territories (including South Australia).

Disclaimer

The content of this newsletter is for general information purposes only and should in no way be treated as formal legal advice.