Casual worker reforms

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4th May, 2021

How recent casual worker reforms affect employers

Fresh changes to awards by the Fair Work Commission have tightened how casual employees are defined and introduced ways for these workers to transition to permanent work.

The Fair Work Commission recently made a few tweaks to the way casual employees are defined, which may have ramifications for employers and their staff alike.

Here’s how those changes affect employers, with a call out to all Australians to familiarise themselves with the basics of employment law and the Fair Work Ombudsman so as to reduce the chance of a dispute.


Why changing the definition of casual workers is important


Patrick Turner, employment senior associate at Maurice Blackburn, believes the changes are in part a response to murky definitions of casual employment that have recently being contested in court.

“Those cases revealed that a significant number of employers had been mischaracterising – and thereby underpaying – employees, treating them as casuals when they were permanent employees entitled to the related benefit,” said Turner.

Fair Work’s reforms intend to prevent these situations by making it simpler to nail down what a casual worker is.

“For employers looking at the statute, there are now less factors they’ll need to consider in attempting to identify whether or not someone is a casual employee.”


How employers tackle casual conversions


The changes also introduce casual conversion laws. These are a way for long-standing casual employees to automatically transition into permanent part-time or full-time position.

Not all casual employees with qualify for conversion laws, however.

“If an employer is not a small business employer, so if they have more than 15 employees, they should be making an offer to employees become a permanent employee if they’ve employed them for at least 12 months,” Turner says.

To be eligible for casual conversion, employees must also have worked a regular pattern of hours for the previous six months on an ongoing basis.


What employers need to do to comply


Despite sounding complicated, the amendments are simple for employers to implement. If you’re an employer, all you’ll need to do is ensure your employees are across casual conversion rights from day one.

“There are now obligations for both small and larger employers to provide workers with a casual employment information statement, which contains information about casual conversion rights,” said Turner.

It’s important to note, however, that while the laws intend to help casual employees transition to permanent employment, workers still get a choice in the matter.

“Nothing in these laws requires any employee to convert to full time employment or part time employment,” said Turner.

“Similarly, nothing in these laws permits and employers require that an employee convert to full-time employment or part-time employment.”

For employers, time also plays a factor in this decision. If you employ casual workers who fit the casual conversion criteria, it’s best to start planning their transition as soon as possible so you’re not caught out.

“Employers will need to make that offer in writing before the 27th of September 2021, or within 21 days. After that, it’s an employee’s 12-month anniversary, whichever is later.”


Industries affected by the reforms


Casual conversion isn’t a new idea in Australia, but these reforms are important for a different reason.

“Although a lot of modern awards already had clauses to that effect in them, it’s still a significant change and it still effects greatly more employees than it did previously,” said Turner.

“These reforms cover all casual workers under the Fair Work Act, which is the great majority of employees throughout Australia.

“Some public servants are covered by the Fair Work Act, but it changes on a state-by-state basis, but effectively nearly everyone in the private sector will be subject to these changes.”


When casual conversion laws don’t apply


Employers don’t have to offer casual conversion if there are reasonable grounds not to, or if the employee is not eligible from the outset.

“It needs to be based on facts that are known or reasonably foreseeable at the time of time of deciding not to make the offer,” said Turner.

“This includes whether the position is going to cease to exist in a period of 12 months, if an employee’s hours of work significantly reduce, or if the hours of work can’t be accommodated by the employee.”

Although it might seem like a system that can be abused, Turner notes that employers should tread carefully.

“Employers should be careful that they’re complying with these new laws.

“As part of the changes, there are express requirements that employers can’t, for example, reduce or very someone hours of work or terminate their employment in order to avoid any wider obligation under this law.”


Minimising future workplace disputes


The changes to workplace awards are designed to increase transparency and minimise confusion, but that doesn’t mean that they’re bulletproof. For this reason, employers and employees should still establish needs from the get-go – particularly when it comes to the idea of “reasonable grounds.”

“This might be a real area where there is dispute between employees and employers about what constitutes a reasonable ground and what doesn’t,” said Turner

“Something that might seem reasonable to an employer might seem unreasonable to someone who’s looking to move out of insecure work into a more secure position, so that’s a potential area of disputation.”

If you’d like to learn more about changes to awards, head on over to Fair Work Australia’s website.