As the holiday season is approaching many businesses in the retail and hospitality industries will be ramping up their casual workforce. Christmas casuals are typically hired for a short period of time during the peak season to cover the increase in demand, however, the business may have no intention of maintaining their employment on this regular basis beyond the holiday season. The Fair Work Legislation Amendments (Closing Loopholes) Bill 2023 (“Closing Loopholes Bill”) could significantly impact how these businesses engage Christmas casuals moving forward if the changes are passed. The Closing Loopholes Bill aims to introduce a new definition of a casual employee and a revised pathway for certain eligible employees to convert to permanent employment. The Bill also proposes to close the labour-hire loophole, criminalise wage theft, and regulate employee-like workers.

Currently, under the Fair Work Act 2009 (Cth) (“FW Act”), a worker is a casual employee if the employer offers them employment on the basis that there is no firm advance commitment to continuing and indefinite work according to an agreed pattern, and the employee accepts the offer on this basis. 

Factors considered by the FWA

When determining whether the employee meets the above criteria, the FWA considers the following factors: 

  • the employer can choose to offer work 
  • the employee can accept or reject work
  • the employee works according to the employer’s needs
  • the employment is described as casual, and 
  • the employee receives a casual loading. 

 The above definition was in line with the decision of the Workpac v Rossato case back in 2021. You can refer to our previous blog which goes over the findings of this ruling. 

The proposed changes in the Closing Loopholes Bill intend to revise this definition which would state that an employee is a casual employee if the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work, and the employee would be entitled to a casual loading. The new definition would consider how the employee is actually being engaged in the employment relationship as opposed to relying on the contractual terms.

The Bill also seeks to change the casual conversion requirements under the FW Act. Currently, under the FW Act, non-small business employers must proactively assess their workforce and offer eligible casual employees the ability to convert to a permanent role. Casual employees must have at least 12 months of continuous service and have worked for the employer on a regular pattern for at least 6 months. 

However, employers can opt to not offer the employee conversion to a permanent role on reasonable business grounds. Employees regardless of the business size can also request to convert to a permanent role after 12 months of service pending, if they meet the eligibility criteria. You can look to our previous blog which provides further detail on the current pathways to casual conversion including the requirements for offering conversion and refusing an employee’s request. 

The Bill proposes to introduce a new pathway for eligible casual employees to change to permanent employment upon their request. Under this pathway, eligible casual employees could notify their employer that they consider themselves eligible for permanent employment after 6 months of service instead of the current 12-month requirement. 

These proposed changes to both the definition of a casual and the revised pathway could have significant impacts on Christmas casuals. However, if these employees are working a regular pattern over this busy period and this continues, they may be eligible for conversion. Employees who want greater job security and guaranteed hours may request to convert to a permanent position. It is important to keep in mind that their employer can still refuse their request on reasonable grounds which could include seasonal fluctuations in demand or operational changes.

However, the proposed amendments may require employers to rethink how they are engaging their workforce during this time and ensure that they are up to date with their obligations in the casual conversion space if the changes are passed. If the business is looking to refuse a request, they would need to ensure that they are able to justify the refusal on reasonable grounds and be able to demonstrate that the current pattern of hours can’t be maintained moving forward. 

Conclusion

If you require guidance on navigating your current and future casual conversion provisions, you can contact us at Employment Innovations.

About Employment Innovations

Employment Innovations is one of Australia’s leading providers of employment services designed to increase productivity and ensure compliance. Its services and solutions include all the tools that every Australian small to medium sized employer needs – including workplace advice, workplace safety, legal services, payroll solutions, migration, human resource management and HR software.

 

Disclaimer

The information provided in these blog articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact Employment Innovations for advice.

 

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