Casu­al Clar­i­fi­ca­tion Emerges From Omnibus Breakdown

Article by: Michael Byrnes, Partner and Katrina Seck, Senior Associate, Swaab

Attend the webinar Casual Employment – New Rules of Engagement on 16th June where Michael Byrnes will explore the decision in Rossato, its potential implications, and the attempts at a legislative fix. In doing so, the risks and costs to business will be considered, along with practical mitigation strategies.

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Despite the fact the major­i­ty of indus­tri­al reforms pro­posed by the Gov­ern­ment in its Fair Work Amend­ment (Sup­port­ing Australia’s Jobs and Eco­nom­ic Recov­ery) Bill 2020 (“Bill”) have been stymied by the Sen­ate employ­ers should wel­come the fact long stand­ing ambi­gu­i­ty sur­round­ing the test for deter­min­ing who a casu­al employ­ee is, and what their enti­tle­ments are, has large­ly been resolved.

The Bill, first intro­duced into Fed­er­al Par­lia­ment on 9 Decem­ber 2020, has suc­ceed­ed in cod­i­fy­ing the work­ing arrange­ments and rights of casu­al employ­ees by:

• insert­ing a def­i­n­i­tion of casu­al employ­ment into the Fair Work Act for the first time (that draws on estab­lished com­mon law prin­ci­ples and focus­es on the nature of the offer of employment);
• pre­vent­ing employ­ers hav­ing to pay an employ­ee twice for the same enti­tle­ment in the event an ongo­ing employ­ee is mis­clas­si­fied as casu­al, to address any poten­tial for ​‘dou­ble dipping’; 
• pro­vid­ing the abil­i­ty for reg­u­lar casu­als to become per­ma­nent after 12 months of employ­ment pro­vid­ed that dur­ing at least the last 6 months of that peri­od the employ­ee worked a reg­u­lar pat­tern of hours on an ongo­ing basis (how­ev­er an employ­er can decide not to make an offer for casu­al con­ver­sion if there are rea­son­able grounds to do so);
• requir­ing the Fair Work Ombuds­man to pre­pare a Casu­al Employ­ment Infor­ma­tion State­ment that con­tains infor­ma­tion about casu­al employ­ment and offers and requests for casu­al con­ver­sion; and
• par­ties may refer dis­putes in rela­tion to the new casu­al pro­vi­sions to the Fair Work Com­mis­sion (pro­vid­ed they are not resolved by dis­cus­sions at the work­place level).

The changes in rela­tion to casu­al employ­ees rep­re­sent one of five pro­posed areas of indus­tri­al reform that had been advanced by the Gov­ern­ment. The oth­er areas, pri­mar­i­ly relat­ing to enter­prise bar­gain­ing and award flex­i­bil­i­ty, had been deeply unpop­u­lar with Labor and the unions and met with fierce resis­tance. Despite enjoy­ing bipar­ti­san sup­port, the part of the Bill that dealt with crim­i­nal­i­sa­tion of wage under­pay­ments was removed by the Government. 

The pas­sage of the Bill fol­lows con­fir­ma­tion late last year that the High Court grant­ed spe­cial leave to Work­Pac Pty Ltd to chal­lenge the Full Fed­er­al Court deci­sion in Work­Pac v Rossato [2020] FCAFC 84. In that deci­sion, the Full Fed­er­al Court found casu­als who have a firm advance com­mit­ment from their employ­er for ongo­ing work may have a claim to the same enti­tle­ments as per­ma­nent employees.

The amend­ments to the Fair Work Act are an oppor­tu­ni­ty for employ­ers to reflect on how their casu­al employ­ees are engaged and, in par­tic­u­lar, whether there is con­sis­ten­cy with the new def­i­n­i­tion of casu­al employ­ee found in the Bill.