Retail Compass Summer edition 2019

Changes to casual employment laws (Australia)

Published on 04 July 2019

What is happening?

Casual employment has recently gained significant public attention following two recent developments:

  • re-examination of what
  • constitutes casual employment in the Federal Court, and the Fair Work Commission’s (FWC) insertion of casual conversion clauses into 85 modern awards (ie documents which set out the minimum terms and conditions of employment, on top of the National Employment Standards).

The Fair Work Amendment (Right to Request Casual Conversion) Bill 2019 also proposes to extend the right to casual conversion to a wider range of employees, including those that are award-free or regulated by an enterprise agreement.

Why does it matter?

Parliament and the courts are cracking down on employers that deem employees to be casual when the substantive arrangement suggests otherwise.

The Federal Court held that casual employment must retain the “essence of casualness”. This requires consideration of the substance of the employment relationship including factors such as irregular work patterns; uncertainty; discontinuity; intermittency of work and unpredictability.

The FWC’s insertion of a casual conversion clause into 85 modern awards will enable casual employees to apply for their employment to be converted to full or part time. Subject to some limited exceptions on business grounds, in order to qualify for this, the employee must have worked on an ongoing basis for over 12 months with a pattern of hours which they could continue to perform post-conversion.

This is likely to have significant consequences for employers in the retail sector who engage employees on a casual basis as it could:

  • increase liability for leave, notice and redundancy entitlements, and
  • limit the control and flexibility an employer has over its workforce by creating a presumption that casuals will migrate to full or part time employment after 12 months.

What action should you take?

  1. Review your casual employment arrangements to determine if the substance of these is consistent with that classification.

  2. Consider pro-actively offering casual conversion.

  3. Have a plan when submitting enterprise agreements to the FWC, including arrangements for casual conversion and setting off.

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