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Australian new Bill introduces a definition of casual worker

  • The Australian Parliament adopted a Bill that defines a casual worker as someone offered work without commitment of continuing and indefinite work.
  • The Bill sheds light on the possibility to convert the casual work contract into a long-term full or part-time employment relationship.
  • The Law also clarifies employers’ economic responsibility in case a casual worker is later on recognised as an employee.

In our July Newsletter we referred to the process of updating Australian industrial relations and labour law on certain aspects, with the aim of increasing their flexibility and practicality.

Among the five groups established to discuss this comprehensive reform so-called the Industrial Relations Omnibus Bill, one focused on ensuring that “casual / zero hours” work options remained accessible and affordable for employers and employees, after the Federal Court had issued a decision saying that there are specific features demonstrating that someone is doing “regular, certain, continuing, constant and predictable” work and therefore should be receiving full-time entitlements (Federal Court of Australia Ruling for the case WorkPac Pty Ltd v Rossato [2020] FCAFC 84).

On 22 March 2021, the Australian Parliament passed the “Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2021” that in Article 15A defines a person a casual employee of an employer if:

  1. 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
  2. the person accepts the offer on that basis; and
  3. the person is an employee as a result of that acceptance”.

Therefore, a casual worker is someone offered work without firm, advance commitment of continuing and indefinite work.

Without such a definition there was a risk that all businesses would be required to pay back their casual workers all entitlements due as long-term full-time employees. This new law avoids the so-called “double dipping” claims (the 25% loading received by law by casual employees on the top of their wage in lieu of receiving permanent employee entitlements plus all the past due wages and social security contributions). Thus, the 25% additional amount can be set off if the employment status is recognised ex post by a Court.

With this new Bill casual workers who work regular and systematic hours have the right to request to convert their contract type into a permanent or part-time employment after 12 months have passed (“Under Division 4A of Part 2 2, a casual employee who has worked for an employer for at least 12 months and has, during at least the last 6 months of that time, worked a regular pattern of hours on an ongoing basis may be entitled to be offered, or request, conversion to full time employment or part time employment”).

Such a new definition is welcomed by the business community because it ensures “casual employment remains a viable option for business, and employees have clear pathways to permanent work”.

Australian Chamber of Commerce and Industry (ACCI) commented the news: “Employers no longer have to be worried they could be forced to pay people twice from double dipping claims, calling an end to $39billion in potential liabilities hanging over their heads.Without these changes passing the Parliament today, we could have easily seen thousands of jobs lost and businesses bust”.

The Recruitment, Consulting and Staffing Association (RCSA) has also positively commented the changes because they “will deliver certainty, confidence and security for Australian businesses and workers as we near the conclusion of the JobKeeper scheme. The changes are a massive win for job creation and economic stability, providing certainty and security for casual workers and their employers. Let’s face it, job security comes on the back of business security and this new law delivers an enormous dose of confidence when business needs it most” said RCSA CEO, Charles Cameron.

He continued: “This amendment removes the roadblocks for Australia’s economic recovery. We now have a clear road ahead of us and a real opportunity to lead the world in economic recovery after the COVID economic shock”.

The remaining part of the Industrial Relations Omnibus Bill did not get the support of the Senate and therefore must be discussed again in the near future.

ACCI reminded that “our enterprise bargaining system is on life support – limiting productivity improvements, suppressing wages, and making jobs less secure.  If action is not taken, enterprise bargaining risks becoming extinct.

Awards are clearly too complex and ambiguous – they fail to support small business people or those who work for them. Part-time workers, the majority of whom are women, will continue to be locked out of additional incomes when they need it most”.