New definition of (and obligations regarding) ‘casual’ work
Late last month Federal Parliament passed the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2021 (amending the Fair Work Act 2009). The legislative changes are designed to address many of the issues that emerged from the WorkPac case which sent ripples across the labour hire industry (and the broader labour market).
(If you would like a quick refresher on the WorkPac case, please see our three-part article series on
WorkPac (decided in 2020) exposed the level of risk surrounding ill-defined casual work arrangements (in the context of labour hire). The case also set the precedent that employees could ‘double-dip’ and claim both unpaid permanent benefits whilst also being paid casual loading fees (per their contracted ‘casual’ status). Naturally, this exposed a high level of liability across the labour hire industry (with some estimates that this liability could reach over $30 billion dollars).
We noted in our aforementioned article series that what was needed, first and foremost, was clarity from the legislation and that a clear definition of ‘casual’ work was a good place to start. Luckily, the Fair Work Amendment Bill does just that.
‘Casual’ definition
The new definition of casual work involves:
An offer of employment made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work;
The person accepts the offer on that basis; and
The person becomes an employee as a result of that acceptance.
Casual conversion pathway
Under the new amendments there is now a clearly defined pathway to casual conversion (on top of an offer from the employer to become a permanent employee).
That is to say, casual employees (as they are now defined) can request a permanent job after 12 months, provided a number of elements are met. These include:
That the employee seeking conversion has worked a regular pattern of hours for at least 6 months (of the last 12 months) on an ongoing basis; and
That employee could continue working those regular hours as a permanent employee without any significant changes.
However, crucially, employers maintain the right to say no (though it must be on reasonable grounds).
Double dipping dilemma
The bill also introduces a channel to resolve disputes regarding casual conversion through the Federal Circuit Court.
Moreover, if court proceedings do find that a casual worker was falsely defined as a ‘casual’ worker, departing from WorkPac, the court is now required to offset any casual loading paid to that employee against the permanent entitlements that the employer is not required to pay. Thus closing the loophole for double dipping.
Though this amendment no doubt will remain controversial, the clarity it does provide will be greatly appreciated.
What does this mean for you?
Employers should heed the changes in the law and take a closer look at employee work arrangements, paying close attention to workers hired as casuals in light of the new definition. Labour hire firms too, should make the appropriate assessments and adjustments to account for these new obligations.
Though ‘double dipping’ has been ruled out by the law, liability for unpaid entitlements may still run a significant financial risk. If the activity in this area of the law says one thing, it’s that this is an area of your business that you cannot afford to get wrong.