Major reforms to the Fair Work Act 2009 (Cth) relating to casual employment passed through parliament on the 22nd of March, effectively becoming law.
The Fair Work Amendment, Supporting Australia’s Jobs and Economic Recovery) Act 2021, was introduced in response to uncertainty over the definition of casual workers, brought about by major court cases Skene and Rossato.
Previously one of the biggest industrial relations bills in Australia’s history, the bill was stripped of areas relating to underpayments, award simplification, enterprise bargaining and greenfield agreements. The only component that remained for consideration by the senate related to casual employment.
Changes to the Fair Work Act
Changes to the Fair Work Act regarding casuals include:
- Defining casual work as whether they receive no ‘firm advance commitment’ or an ‘agreed pattern of work’ from their employer.
- Offsetting permanent entitlements based on casual loading.
- Requiring employers of casuals to consult with them about conversion to permanent employment.
- New conversion rules exclude casuals being converted to fixed-term contracts.
- Preventing employers from terminating casuals to circumvent obligations.
Providing a definition of casual workers should give organisations a greater degree of confidence over their hiring these types of workers.
However, to respond to casual conversion requirements, businesses will need to gain visibility of their contingent workforce, recruitment and other third-party supply chains to determine exposure. This includes altering employment and supplier contracts, implementing assessment criteria and processes to assess casual conversion, and establishing auditing and reporting.
“There are two elements as to what employers should be doing, almost
irrespective of this bill. The first is – get your house in order. The second is,
consider the foundations of the house and whether they’re actually what you
need going forward.”
Natalie James, Partner at Deloitte, former Fair Work Ombudsman
Businesses will be given a six-month grace period to review and amend their casual workforce processes before the changes come into effect.