Several key changes in employment law have taken place over the period from the end of last year to now, particularly with regard to the rights and obligations associated with casual employment and NES entitlements. Employers need to be aware of these changes and how they impact on their current workplace practices and policies.
In what has emerged as an eventful period, several key changes and trends in industrial relations law have arisen in the period from the end of last year to now. Beyond the continuing fallout from the WorkPac v Skene (Skene) decision of August last year, government amendments to the Fair Work Regulations 2009 (FW Regulations) to stop ‘double dipping’, casual conversion rights and the inclusion of domestic violence leave in the NES have all contributed to changes that employers must be aware of.
‘Double Dipping’ of ‘casual’ employees
As covered in our article, the August 2018 decision of the Full Court of the Federal Court in Skene found that Mr Skene, employed as a casual employee, was in fact not a casual employee and entitled to annual leave under the National Employment Standards (NES).
The decision has sent a shockwave through employers, particularly in the labour hire industry, who rely heavily on ‘casual’ employment. Concerns were raised that employees classified as casuals and who had been paid a ‘casual loading’ on top of a base wage, if found to be full-time or part-time employees, would be able to ‘double dip’ by claiming leave and other entitlements.
Prior to the Christmas break, suggestions were raised that legislative amendments should be made to the Fair Work Act 2009 (Cth) (FW Act) in order to clarify the definition of casual employment. Though changes to the FW Act have not been made, the Federal Government did decide that changes to the FW Regulations should be made to give employers the right to claim a casual loading should be set-off against NES entitlements. These changes took effect on 18 December 2018.
The new regulation applies where:
- an employee is employed on the basis they are casual;
- the employer pays the employee a casual loading that is clearly identifiable as being an amount paid to compensate the person in lieu of NES entitlements not available to casual employees. Examples of where it may be clearly identifiable include in correspondence, pay slips, contracts and relevant industrial instruments;
- despite being classified as a casual employee, the employee was, in fact, a full-time or part-time employee for the purposes of the NES; and
- the employee has made a claim to be paid for one or more of the NES entitlements that they did not receive.
Under this regulation, the employer may make a claim to have the casual loading taken into account in determining any amount payable by the employer in lieu of providing one or more NES entitlements not available to casual employees.
In light of this new regulation, we recommend employers:
- write to existing employees employed as casuals, or amend payslips issued to casual employees;
- amend casual employment contracts; and
- include content in new industrial instruments,
to make clear that the casual loading paid to employees classified as casuals is to compensate them in lieu of receiving NES entitlements not available to casual employees.
Casual conversion clause
As of 1 October 2018, a new clause was inserted into modern awards giving casual employees the right to request conversion to full-time or part-time employment.
Where a casual employee works ‘a pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to perform as a full-time employee or part-time employee’, and has done so for a period of 12 months, the new clause entitles that employee to request, in writing, to be converted to full time or part time employment.
A response must be made, in writing, within 21 days of receiving the request, and if the request is denied, must set out reasonable grounds for such denial.
Reasonable grounds include where conversion would require a significant adjustment to an employee’s hours of work in order for the employee to be engaged as a full or part time employee in compliance with the award, or where it is reasonably foreseeable or known that the position will cease within 12 months or the hours of work will be significantly reduced in the next 12 months.
Employers must have provided a copy of the new modern award conversion clause to casual employees employed as at 1 October 2018 by 1 January 2019. New employees must be provided a copy of the clause within 12 months of their employment commencing.
Employers should be aware of the operation of the new conversion clause and be prepared for written requests from long standing casual employees. Employers will need to ensure that they are forecasting the requirements of casual positions moving forward in order to accurately predict when and where conversion will be appropriate.
Family and domestic violence leave
From 12 December 2018, the Fair Work Amendment (Family and Domestic Violence Leave) Act 2018 (Cth) took effect. As a result, the NES now entitles an employee to unpaid leave to deal with family and domestic violence.
All employees, including part-time and casual employees, are entitled to five days of unpaid family and domestic violence (FDV) leave each year. Where employees are already entitled to unpaid FDV leave under a modern award or their existing employment arrangements, the NES minimum will apply where those existing entitlements are less generous than the NES minimum.