Offering a glimpse of the next phase of Labor’s employment reforms, Workplace Relations Minister Tony Burke has announced plans to revise legislation surrounding casuals converting to full-time contracts.
The proposal is to legislate a new definition of casual work, giving over 2.7 million employees (about a quarter of Australia’s workforce) a better chance of accessing guaranteed hours and paid entitlements such as annual leave and sick leave.
The new legislation forms part of a much larger initiative to improve job security and paid entitlements for Australian workers, following a broad sweep of changes to the Fair Work Act already ushered in by Secure Jobs, Better Pay.
Burke claimed during a speech at the Sydney Institute, “No casual will be forced to become a permanent employee, but for those who desperately want security – and are being rostered as though they were permanent – for the first time, job security will be in sight.”
The current definition of a casual
The Fair Work Act was amended in March 2021 to include the most recent definition of a casual employee. This definition still stands, meaning a worker is only classed as casual “if they accept a job offer from an employer knowing that there is no firm advance commitment to ongoing work with an agreed pattern”.
This definition places the emphasis on the terms of the employer contract, meaning that how the role is characterised in writing (rather than its day-to-day reality) is the key determinant of whether or not the employee is classed as casual.
What will the new definition be?
Burke plans to revert to the earlier definition, meaning a casual will only be classified as such if they have no regular pattern in their hours worked.
Those who do have a regular working pattern will be regarded as permanent staff and given the chance to convert to full-time employment. This opportunity comes with a few caveats:
The employee must have worked with the same employer continuously for at least 12 months.
The employee’s work must have included a regular pattern for at least the last 6 months of that employment period.
The employee must be able to continue to work that pattern without any foreseeable problems.
The new definition will close a loophole that leaves employees stuck with a casual status even when they work permanent regular hours.
What will stay the same?
The government plans to uphold agreements made with the Business Council of Australia and other organisations, meaning businesses are likely to still be able to refuse casual conversion providing they have “reasonable grounds”. For example, if a position will cease to exist in the next year, or if the employee’s hours will significantly shrink, the employer is not obligated to offer a conversion.
Crucially, the Fair Work Act notes small businesses — that is, businesses with less than 15 employees — do not have to offer casual conversions, but employees are still free to request one if they meet the above requirements. This is also a provision that’s unlikely to change with the new legislation.
Putting an end to ‘double dipping’
Burke has accused some employers of ‘double dipping’. This involves reaping the benefits of permanent employment — namely, having a flexible workforce that is consistently available — together with the most desirable aspects of casual contracts — such as avoiding the financial commitments of permanent contracts and paid entitlements.
Burke claims some casual employees are “being used as though they’re permanent workers, with the employer taking all the advantages of a reliable workforce and not providing any job security in return.”
The new legislation will be aimed at putting an end to double dipping, forcing employers who use casuals like permanent staff to offer them the status and entitlements of a permanent employee. For Australian casuals seeking job security, the pathway has never been clearer.
What should you do?
The legislation surrounding casual employees hasn’t changed yet. The new rules form part of a broader set of reforms expected to be introduced to parliament from September onward. For now, you should continue to adhere to all the existing provisions.
Do you know the essentials of casual employment?
It can be tricky for business owners to keep up with entitlements for casual employees. Our FREE E-Guide covers all the basics of casual employment for small businesses.
When the changes do come into effect, you can contact Employsure if you have any concerns about your obligations. Our Advice Line is FREE for all Australian business owners – call us on 1300 651 415.
