Employers and employees are set to receive further clarity on Australia’s workplace laws regarding casual employment after a two-pronged announcement by the Australian Government.
In a series of developments, Minister for Jobs and Industrial Relations Kelly O’Dwyer today sought to clarify the rights and responsibilities of employers and employees in relation to casual employees.
The move intends to stop casual workers from “double dipping” on loadings and entitlements, while extending the right for casual employees to seek permanency, currently provided for through the modern awards system, to many casual employees in Australia.
The proposed new regulation would clarify that if a loading has been paid to casual employees in lieu of entitlements afforded to permanent employees, such as annual leave and redundancy, it may potentially be set off against any subsequent claim to be paid those entitlements.
It would bring legislation in line with the common understanding around this issue in Australian workplaces, ensuring there is no “double dipping” if casuals are deemed to be full-time employees.
The Government intends to recommend to the Governor-General that he make a Fair Work Regulation to provide greater clarity of an employer’s legal rights with respect to offsetting payments of casual loading amounts against National Employment Standards (NES) entitlements.
This clarification was necessary following a Full Federal Court decision (Workpac v Skene) earlier in the year that found a casual employee working on an ongoing basis was in effect a permanent employee and thus entitled to be back-paid annual leave and other full-time employee entitlements.
The announcement by Minister O’Dwyer addresses months of uncertainty created by the decision.
“AREEA members welcome the Minister taking active steps to provide certainty to address the clarification of casual employment rights and responsibilities,” AREEA Chief Executive Steve Knott said.
Mr Knott said the impact on business would have been significant without the Government moving to provide certainty to employers and employees.
“Had this been allowed to stand, many SMEs and big businesses alike would’ve been crippled, not to mention the fallout which would have resulted in administrators being appointed and the significant drain on the Federal Government’s Fair Entitlements Scheme,” he said.
A recent decision by the Fair Work Commission provided eligible award-reliant casual employees with a right to request to convert to full-time or part-time employment
Under the decision, employers can only refuse employee requests on reasonable grounds after consulting with the employee.
“If award reliant employees have the right to make a request and it is subject to reasonable safeguards for employers, it is only fair that the same right is extended to other casuals who currently do not have the same right,”Minister O’Dwyer said.
A new regulation will provide that, where an employer has paid an identifiable casual loading to an employee engaged as a casual, it may potentially be offset against any subsequent claim for NES entitlements. It will, of course, still remain a matter for a court to decide to apply an offset in any particular circumstances.
“This is an important issue to maintain confidence in employment, for both employers and employees,” Minister O’Dwyer said.
“That is why I have also recently intervened in the WorkPac v Rossato matter before the Federal Court of Australia. My intervention and the making of this regulation are complementary measures, both seeking to provide certainty around existing general law rights and to prevent employers having to pay employees their benefits twice.”
The Australian Government has also announced further legislative changes which will extend the right for casual employees to seek permanency, currently provided for through the modern awards system, to many casual employees in Australia.
“AREEA members in the resources and energy industry will largely be unaffected by this change, however support the legislative regime providing greater certainty on who is and who isn’t a casual employee,” Mr Knott said.
This follows a recent decision by the Fair Work Commission as part of the 4 yearly modern awards review process providing eligible award-reliant casual employees with a right to request to convert to full-time or part-time employment.
It is anticipated an amendment to the National Employment Standards, in line with the modern award casual conversion decision, will be pursued to ensure that all casual employees will be entitled to casual conversion rights.
Employers will still be able to refuse employee requests on reasonable business grounds after consulting with the employee.
While members will largely be unaffected by the proposed change, AREEA supports legislation providing greater certainty in determining the rights and entitlements of casual employees.
AREEA recognises that a range of technical considerations and potential unintended consequences that must be worked through before a new statutory right for casual conversion is introduced.
The announcements follow the Government consulting with AREEA to canvass the solution of casual conversion with members.
While such a solution was met with a mixed response, today’s announcement indicates the Government had to compromise in relinquishing the conversion clause in the NES to deliver the priority of a fix to “double dipping”.
For more information on these proposed changes, please contact [email protected]
