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We Explain Recent Changes to Law for Casual Employees.

1 min read

07 Jul 2021

There have been recent changes to employment law relating to casual workers. All employers should take note to ensure compliance with and understand the new legislation. Employers should not underestimate their casual employees and should comply with their obligations. Casual employee entitlements have been significantly expanded and employees are increasingly asserting their rights.

The Background

In recent case of Workpac v Rossato. Rossato was a casual employee who successfully sued his employer for entitlements due to him as a full-time employee. This claim was for thousands of dollars of annual leave and other entitlements. He also retained his 25% casual leave loading.

The recent legislative amendments and case law around the definition of a “casual” is the controversy and confusion for Australian business owners, employers and employees. To mitigate the confusion, the Fair Work Commission and Ombudsman have implemented compulsory changes across the Australian workforce. These legislative changes must be abided by when engaging and paying casual employees. They also apply to existing casual employees.

The New Risk To Employers

If you have engaged or been engaged as a casual, or are currently engaged in a casual working relationship, these new amendments and compulsory changes are likely to affect you. It is important that you, as a business owner, employer or employee are aware of these changes, your obligations, and your rights.

The casual employment changes affect all employers of all sizes and is now a part of the National Employment Standards (NES). The new laws now clearly define casual employment.

Essentially acting early, checking the class of employee and updating old employment contracts will help prevent you from making errors in classifying employees. It will also avoid the payment of entitlements if a classification error occurs and a claim is made.

All employers are exposed to such a claim from casual employees who should be classified as full-time employees. There are ways employers can protect themselves.

Does this apply to my business?

Yes, the new laws apply to all employers and does not exclude small businesses.

Overview of what has changed

Some of the changes include:

  • Definition of casual employment
    Casual Employment has not previously been defined and is now defined as:
    Where a person accepts an offer of employment from the employer where there is “no firm advance commitment to continuing and indefinite work according to an agreed pattern of work”.
  • Casual Conversion
    This is where a casual who works regular hours or shifts for a certain period of time is entitled to convert to full-time employment.
  • Leave Loading
    Employers can protect themselves from leave loading double dipping. If there was a misclassification of a casual employee, an employee could make a claim for benefits not paid such as annual leave. The new laws allow you to offset the 25% casual loading against any claim if it is in your employment contracts. The key here is that it must be in your employment contracts.

This will protect employers in such an instance in the future if a misclassification was to occur.

Why you should act?

The recent amendments to the Fair Work Act and definition of a “casual” employee may result in an employee entitled to:

  1. annual and personal leave entitlements;
  2. a right to request their employment be converted to full or part time employment; and
  3. different pay rates.

It is important, as a business owner, employer or employee that you understand the new laws surrounding “casual” employees.

As an employer what can you do to protect yourself and to be sure you comply with the new changes?

Implement or Update Employment Contracts – including for casual workers

The definition of Casual employment has changed. You must also consider the leave loading offset provision.

To make sure you are protected fully your employment agreements should be relevant to your situation and industry. Not an online template.

Casual Conversion

You will need to identify and convert any casuals to full time or part time employees if they are eligible.

Casuals employed for a period of 12 months, who have worked for a regular pattern on an ongoing basis for six months of that period, may qualify for converting to permanent employment.

Provide all casual employees with a copy of the CEIS.

For small businesses, the deadline was 27 March 2021, for other businesses this is later.

Given the nature of these changes to employment law for casuals and the potential penalties to employers for non-compliance, it is best to get legal advice. You should be certain of how these laws affect you and how to implement them into your HR procedures. Protecting your business against claims of this nature and other employment related claims is quick and easy.

If you believe these changes may affect your business or your employment, you should contact us now.

Our employment lawyers can provide advice on underpayment issues, casual employment contracts and how to comply with these new obligations.

Call us today on 1300 907 335 or simply fill out the contact form on this page and we will get back to you promptly.

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