Employment law in Australia has been the subject of numerous changes as part of the Federal Government’s “Closing Loopholes” reform. The most recent changes target casual employment and casual conversion. Finian McGrath, a senior associate lawyer at Miller Harris Lawyers, provides some further information about these changes.
Casual Employment – Definition Change
On 26 August this year, the definition of casual employment changed. The changes introduce expansive criteria against which to assess “a firm advance commitment to continuing and indefinite work.” That commitment (or its absence) is what has traditionally characterised casual employment. But the latest reforms compel you to go further. Now, you need to consider the ‘real substance, practical reality and true nature’ of the employment relationship, to ascertain whether it is casual or not. That consideration must take account of any ‘mutual understanding’ between the employer and employee.
The purpose of these changes is tolerably clear. Employers are now being compelled to categorise their employees according to the reality of their engagement. No longer will contractual platitudes, or bare recitals, excuse employers from paying entitlements to workers who are realistically—or should be—permanent employees. Employers are being called upon to face the reality of their employment relationships. Under this legislation, employers who want permanent staff must pay permanent prices.
In many respects, that will be a welcome change in Australian industrial relations. But it is not without its complexities. Under the reformed legislation, employment contracts will count for less than the substance of a working relationship. In almost every case, and employer’s view of that relationship will differ vastly from an employee’s. The ambiguities that will afflict the new definition should not be understated.
Among other things, the latest changes will vastly increase the record-keeping requirements for businesses that genuinely depend upon a casual workforce. Those businesses are often the most vulnerable, too. It is not yet clear how they will respond to the latest raft of changes. However, it is possible that many will be unable to keep up.
Casual Conversion – New Employee Choice Pathway
Those employers who are able to sustain a casual workforce in the face of these changes, must also be aware of their employee’s new rights of choice. Particularly, employers and employees should be aware of the changes to casual conversion laws. Casual employees can now request to convert to permanent employment through the new “Employee Choice Pathway”. Under the Fair Work Act, casual employees may notify their employer that they believe they no longer meet the requirements of a casual employee. The employer will then have 21 days to respond to that notification, either accepting or declining the notification.
This pathway burdens employees with the onus of instigating the casual conversion process. But the employer will carry the burden of responding. If an employer declines an employee’s notice under the Act, the employer must explain why. If a disagreement then arises, the employee may take further action against the employer.
These changes may combine to increase the presence of disputes among casual workers and employers. Employees and employers alike should take time to consider their positions, and familiarise themselves with these changes, if they wish to avoid the risk of a workplace dispute.
This article is general in nature and does not constitute legal advice.
Finian McGrath is a senior associate at Miller Harris Lawyers practicing in employment law and commercial litigation. For further information visit www.millerharris.com.au; or if you wish to discuss your circumstances, please contact Finian on 07 4036 9700.