Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 – The Impact on Casual Employment

OWEN WEBB AHA|SA WORKPLACE RELATIONS MANAGER

On 26 March 2021, the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 (‘the Fair Work Amendment Act’) was assented to.

The Fair Work Amendment Act amends the Fair Work Act 2009 (Cth) (‘Fair Work Act’) to give effect to the changes passed through Parliament from the Government’s Industrial Relations Omnibus Bill.

The Federal Government’s Omnibus Bill was, in the end, significantly amended from what was first introduced into the Parliament. The Bill originally contained 7 Schedules, however after a lack of support from Labor and the Senate cross -benchers, Schedules 2 to 6 were removed, those schedules proposed changes in the areas of Modern awards, Enterprise agreements, Greenfields Agreements, Compliance and enforcement and the Fair Work Commission.

Importantly however an amended version of Schedule 1 – Casual employees and Schedule 7 – Application, saving and transitional provisions were passed. The passing of these Schedules provides for a number of important changes with respect to casual employment. Changes include the introduction of a definition of a casual employee being inserted into the Fair Work Act 2009 (Cth) (‘Fair Work Act’) and the introduction of casual loading offset provisions to prevent the potential of “double dipping” where incorrectly classified employees try to claim access to certain leave provisions despite having been paid a loading. This is extremely positive news for the hotel industry as it provides a greater level of certainty and confidence for employers with respect to the employment of casual employees.Included below is a summary of these important changes:

DEFINITION OF A CASUAL EMPLOYEE

The Amendment Act provides for a definition of a casual employee to be inserted into the Fair Work Act. A person will be defined as a casual employee of an employer if:

• An offer of employment made by the employer to the person is made on the basis that the employer makes no “firm advance commitment” to continuing and indefinite work according to an agreed pattern of work for the person; and

• The person accepts the offer on that basis; and

• The person is an employee as a result of that acceptance.

The list of factors to determine whether a ‘firm advanced commitment” has been made are limited to the following:

• Whether the employer can elect to offer work and whether the person can elect to accept or reject work;

• Whether the person will work as required according to the needs of the employer;

• Whether the employment is described as casual employment;

• Whether the person will be 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.

Importantly, a casual employee who performs a regular pattern of hours will not of itself indicate a “firm advance commitment” to continuing and indefinite work.

The employment relationship will also be determined on the basis of the offer of employment and the acceptance of that offer, rather than any subsequent conduct of the parties post the contractual engagement.

CASUAL CONVERSION

The Amendment Act amends the Fair Work Act to include new casual conversion provisions. The following conversion provisions are now included in the Fair Work Act.

Employer offers for casual conversion:

A provision that employers must make an offer to a casual employee to convert to either full-time or part-time employment, where the casual employee has:

• Been employed by the employer for a period of 12 months beginning the day of employment started; and

• During the last 6 months of that period has worked a regular pattern of hours on an ongoing basis.

The offer to convert will need to:

• be made in writing; and

• be an offer for the casual employee to convert to: - Full-time employment where the employee has worked the equivalent of full-time hours during the period or - Part-time employment where the employee has worked less than the equivalent of full-time hours during the period.

• Be given to the employee within the period of 21 days after the 12-month period.

Employee must give a response:

Casual employees will be required to give the employer a written response to the employers offer to convert within 21 days after the offer is made, stating whether they accept or reject the request.

If the employee fails to give the employer a request, the employee is taken to have declined the offer.

If the casual employee rejects the offer, then they will lose their right to make a request to convert to full-time or part-time at a later time.

Acceptance of offers:

If an employee accepts an offer to convert, the employer must within 21 days after acceptance, consult with the employee and provide them written notice of:

• Whether the employee is converting to full-time or part-time employment

• The employee’s hours of work after the conversion takes effect

• The day the employee’s conversion will take effect (which will be the first day of the employee’s first full pay period that starts after the day the notice is given, unless the employee and employer agree to another day).

Small business employer exemption:

A small business employer is exempt from the requirement to make an offer of conversion or provide notification that they are not going to be making an offer. A small business employer is already defined under section 23 of the Fair Work Act. A small business employer is one that has a headcount of fewer than 15 employees, taking into account full-time part-time and casual employees that are employed on a regular and systematic basis.

The amendments to the Fair Work Act do not however prevent a casual employee from making a request to the employer to convert.

When an employer offer is not required:

Employers will not be required to make an offer to convert to a casual employee if:

• There are reasonable grounds not to make the offer, and

• The reasonable grounds are based on facts that are known, or reasonably foreseeable, at the time of deciding not to make the offer.

Reasonable grounds for deciding not to make an offer include, but are not limited to:

• The employee’s position will cease to exist in the period of 12 months after the time of deciding not to make the offer;

• The hours of work which the employee is required to perform will be significantly reduced in that period;

• There will be a significant change in the days and or times the employee’s hours of work are required to be performed which cannot be accommodated within the days or times the employee is available to work during that period.

An employer that is not making an offer to convert needs to provide the employee with a written notice within 21 days after the end of the 12 month period, that they are not making such an offer, and the reasons for not making the offer.

If an employer fails to give notice to a casual employee, the employee has a residual right to request conversion to full-time or part-time employment in certain circumstances.

EMPLOYEE REQUESTS FOR CASUAL CONVERSION

Under the amendments to the Fair Work Act, casual employees will be able to make a request for conversion from their employer, provided:

• The employee has worked for at least 12 months beginning the day the employment started;

• In the 6 months ending the day the request is given, worked a regular pattern of hours on an ongoing basis; and

All of the following apply:

• The employee has not, at any time during the 6-month period ending the day the request is given, refused an offer made to the employee from the employer for conversion;

• The employer has not, at any time during the 6-month period ending the day the request is given, given the employee a notice of the employer’s decision not to make an offer on reasonable grounds;

• The employer has not, at any time during the 6-month period ending the day the request is given, already given a response to the employee refusing their request for conversion;

• The employee request has not been made during the 21 days after the 12 months beginning the day the employment started.

The employee will need to make the request for conversion in writing and need to specify full-time or part-time employment.

The employer will need to respond to the employee request within 21 days after the request is given to the employer, stating whether the employer grants or refuses the request.

The employer must not refuse the request unless the employer has consulted the employee and there are reasonable grounds to refuse the request and the reasonable grounds are based on facts that are known, or reasonably foreseeable, at the time of refusing the request.

CASUAL EMPLOYMENT INFORMATION STATEMENT

Under the amendments to the Act, the Fair Work Ombudsman is required to prepare a Casual Employment Information Statement and an employer will need to give each new casual employee the Casual Employment Information Statement before, or as soon as practicable after, the employee starts employment as a casual employee with the employer.

For existing casual employees (employed prior to 27 March 2021) of a small business employer the Casual Employment Information Statement will need to be provided to casual employees as soon as practicable after the commencement of the amendments to the Fair Work Act. For non-small business employers they will need to provide existing casual employees the Casual Employment Information Statement as soon as possible after 27 September 2021 (the end of the transition period (6 months after commencement).

CASUAL LOADING OFFSET

The Bill also importantly provides for casual loading offset provisions, which provides a fix to the current problems associated with persons that claim they have been incorrectly classified as a casual employee and entitled to leave entitlements under the National Employment Standards, a Modern Award, an Enterprise Agreement or a contract of employment.

Where a person has been paid a loading but has been incorrectly classified as a casual employee and such a person makes a claim for leave entitlements, the amendments to the Act enable the employer to offset any amounts payable by the employer for leave entitlements by an amount equal to the loading amount.

WHERE TO FROM HERE

Schedule 7 of the Amendment Act amends the Fair Work Act to make application, saving and transitional provisions.

Importantly it provides for transitional provisions in relation to casual employees which provide a transition period of 6 months from commencement of the amendments to the Act, during which time employers must assess all existing casual employees against eligibility conversion criteria and offer conversion, unless they have reasonable grounds not to.

The AHA|SA will be providing assistance and guidance to Members during this transitional period to ensure the requirements of the Act are complied with.