Fair Work Act

By Alex Millman, NRA Legal

As the Fair Work Act 2009 (Cth) (FW Act) celebrates its tenth year, there is no better time to reflect on how it, and the surrounding industrial relations environment, has changed over time.

In part one of this series we discussed how the recent rise of the unregistered union has altered the industrial landscape, and what this could mean for your business.

A similarly hot topic of late, considerable confusion currently surrounds casual employment, and what employing staff on a casual basis truly entails. A popular choice for employers who require a degree of flexibility, an understanding of obligations which arise out of a casual employment relationship are critical to ensure compliance with the FW Act.

What is a casual?

Off all the areas of industrial relations law to be disputed under the FW Act, you would think the nature of casual employment would not be one of them. After all, it is generally accepted that a person who is neither full-time nor part-time is casual … right?

Alas, whilst this general rule of thumb seemed to work for most of the half-century of so, the Full Court of the Federal Court last year pointed out that the FW Act did not, at any point, define what was meant by ‘casual employment’, despite variously extending and limiting the rights of casual employees.

The Full Court also pointed out that any instrument made under the FW Act, such as an enterprise agreement or modern award, could not use their own definition of ‘casual’ for the purposes of the FW Act. This decision had significant ramifications, since a number of modern awards define a casual employee as “a person engaged and paid as such”.

The consequence is that although an employee may be a casual employee for the purposes of the modern award or enterprise agreement under which they are employed, that is irrelevant when determining whether an employee is ‘casual’ for the purposes of the FW Act.

Since previous legislation also never defined casual employment, the question becomes: why has this never been an issue in the past? The answer may surprise you – it has, but the court decided the other way (narrowly) on the facts of that particular case. With the status quo maintained, the issue simply flew under the radar until last year’s decision.

With the question of “what is a casual?” back on the radar of industrial relations advocates and politicians alike, it seems that after decades on non-definition, casual employment will be categorically defined by the end of 2019, one way or another.

Changes to casual employee entitlements

Part of the reason why the question of “what is a casual?” is so important is because the answer will determine the entitlements of the employee under the FW Act.

The question of whether an employee is casual or not generally arises in the context of the employee claiming an entitlement to paid leave, these being some of the few entitlements still not extended to casual employees.

However, changes to the modern awards have seen casual employees accrue greater rights and entitlements than they previously enjoyed despite their non-permanent status. As primary example of this is in the extension of overtime rates to casual employees under the General Retail Industry Award 2010.

Previously, casual employees were not entitled to overtime rates, the thought being that since casual employees can choose to make themselves unavailable for work, any early, late, or long hours that they choose to work are theirs to take or leave.

However, since January 2018 casual employees in the retail industry employed under the modern award have been entitled to overtime rates for working early, late, or long hours.  Further, in November 2018, the Saturday penalty rate payable to casual employees was increased, and the hours within which this penalty applied extended.

The entitlement of casual employees to overtime rates is still patchy – for example, casual clerical employees have always been entitled to overtime rates on the same basis as permanent employees, whilst in the private corrections and detention industry overtime rates are still the sole purview of full-time and part-time employees. Whether this will change in the near future remains to be seen.

Security – casual conversion and unfair dismissal

Despite all statistical evidence indicating that levels of casual employment have remained steady around 25% for the last decade, there has been a popular (albeit unsubstantiated) perception that rates of ‘insecure’ casual employment have been increasing.

To combat this, in late 2018 the Fair Work Commission inserted a standard clause into 89 modern awards to give casual employees the right to request conversion to permanent employment after a sufficient period of service.

Whilst casual employees have always had the right to approach their employer and discuss the prospect of permanent employment, now that discussion must occur within specific statutory parameters.

In early 2019 the Morrison Government proposed amendments to the FW Act to create a universal right for casuals to request permanent employment within the legislation itself rather than under the modern awards; however, with the legislation lapsing when Parliament was prorogued prior to the election, it remains to be seen whether this piece of legislation will be revived.

Although casual conversion may have been the most significant change to casual employment in the last twelve months, the main area where the FW Act expressly changed the rights of casual employees is in the area of claims for relief from unfair dismissal.

Under the Workplace Relations Act 1996, casual employees could seek a relief for unfair dismissal if they had worked on a regular and systematic basis with their employer for at least 12 months, and had a reasonable expectation of ongoing employment at the time of their dismissal.

Under the FW Act, the bar was lowered – casual employees can now seek relief for unfair dismissal of they were employed on a regular and systematic basis for the duration of a period equal to the minimum employment period (six months, or twelve months if the employer is a small business employer), and at any point during their employment had a reasonable expectation of ongoing employment.

In summary

Casual employment has long been a staple of the Australian workforce; in recent months and years, it has become a hot political topic, taking pride of place in the policy positions of major parties going into a general election for the first time since the FW Act commenced.

The last ten years have seen the nature of casual employment evolve into a more recognised form of continuing employment, and the creation of additional rights and protections to support this. With the Morrison Government returning to power following the May election, we are unlikely to see significant legislative changes to casual employment, which will leave the issue firmly in the hands of the courts where significant legal proceedings are already underway. The potential for ‘casual’ as an employment status to be drastically redefined by judicial determination in these case cannot be underestimated.

As the retail and fast food industries employ some of the most highly-casualised workforces in Australia, it should go without saying that employers in these industries cannot afford to be casual about casual employment.

Do you have questions regarding how casual employees are utilised in your workforce? Contact one of our dedicated workplace relations specialists on 1800 RETAIL (738 245).