Recently, a decision regarding casual employees has caused many HR and legal firms to send out alerts regarding casual employment. These alerts indicate that a recent decision in the Federal Court known as “Workpac” could see casuals able to make a claim against their employer that they should be converted to full time or part time employment.
In this article, the performHR team help unpack this decision, giving business leaders an understanding of the possible impact to their organisation, some practical tips to help your mitigate risk, and offer support where needed.
Understanding Casual definitions
Employers utilise casual employees for many different reasons. As a result of the Workpac decision, Employers are now encouraged to review their current pool of casual employees with a view to determine which employees would be considered to be employed on a regular and systematic basis.
Key legislation such as the Fair Work Act 2010 under Section 12 defines long term casual as follows:
“This is an employee at a particular time that is a casual employee and the employee has been employed by the employer on a regular and systematic basis for a sequence of periods of employment during a period of at least 12 months.”
Despite this definition, the application of this legislation at common law is taken on a case by case basis in determining the meaning behind “regular” and “systematic”.
We know that ABS statistics show that casual employment in Australia remains at around 20% of the population and in some industries, due to the need for flexibility, the percentage of the workforce in those organisations it would be higher.
What are some indicators of a 'regular and systematic' basis?
- A clear pattern or roster of hours is strong evidence of regular and systematic employment.
- The term 'regular' implies a repetitive pattern and does not mean frequent, often, uniform or constant.
- The term 'systematic' requires that the engagement be 'something that could fairly be called a system, method or plan'.
Casual employees in the Modern Awards
The Modern Award Review in 2017 saw major changes to casual employees covered by 85 of approximately 122 modern awards. These changes mean that a long-term casual employee can now elect to convert to full-time or part-time employment depending on the number of hours they regularly work.
The employee can now additionally request conversion to part-time or full-time employment if they have worked a regular pattern of hours for a period of 6 to 12 months. This is dependant upon which Modern Award the employee is covered by.
Employers who employ people under the Awards affected can refuse the casual employee’s request on reasonable grounds, including:
it would require significant adjustment to the casual employee’s hours of work to accommodate them in full-time or part-time employment under the applicable modern award
it is known or reasonably foreseeable that the casual employee’s position will cease to exist
the employee’s hours of work will significantly change or be reduced within the next 12 months
Why is the Workpac Decision so significant
The Workpac case has raised two major changes to the employment landscape.
Firstly, regardless of the provisions that apply to the workforce though modern awards or enterprise agreements, if an employee works a reasonable, predictable pattern of work combined with the expectation of ongoing work, they may claim they are a permanent employee as opposed to a casual.
Secondly, the employee could become a permanent employee during the employment relationship, despite both the employer and employee describing them as a “casual”. Essentially, if the characteristics of the employment relationship including the hours worked by the employee display a level of certainty, regularity and predictability, then it could be considered a permanent employment relationship.
What action can concerned Employers take?
Conduct a review of your current casual pool to determine if any of them meet the definition of regular and systematic.
Where you have determined that, as a minimum, over the last 6 – 12 months an employee may meet the criteria of regular and systematic, you should write to your employees with a view to consulting with them and consider moving them from casual employment to full time or part time employment.
Please ensure that you review your Modern Award or Enterprise Agreement in this process to ensure that any other relevant condition have been adhered to for your specific industry.
Where can Employers find support?
If you are an employer and are unsure about the employment status of your workforce, or need help to review your casual pool, the performHR team are here to help.
Our team of experts are able to support with the review and audit of your casual workforce, providing advice and support around the associated consultation process.
Start the conversation with our team of experts today.