The skinny on the skinny IR Omnibus

In brief 3 min read

Recent changes to the Fair Work Act 2009 (Cth) (the FW Act) mean employers should review their casual employment contracts.

Key takeaways

• Amendments to the FW Act were passed by both Houses of Parliament on 22 March 2021, but were considerably fewer than those initially set out in the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020 (the Bill) introduced into Parliament in December 2020, with all schedules bar that relating to casual employment being removed.
• Employers should review their casual employment contracts to ensure that they contain provisions that make it clear the employment is on a casual basis, and otherwise reflect the new provisions.

Details of the changes

The FW Act has been amended, with the insertion of:

• a definition of 'casual employee'; and
• the right for certain casual employees to request that their status be converted to permanent employment.

In essence, the amendments reverse the issues arising from Workpac Pty Ltd v Rossato¹ decision (ie the risk that certain casual employees may in fact be permanent employees who are entitled to all the benefits associated with such employment).

Relevantly, regarding the casual employment issues raised in Workpac Pty Ltd v Rossato, the amendments clarify that if at the time an offer of employment is made:

• the agreement makes clear that the employment is on a casual basis;
• the employer makes no firm advance commitment to provide continuing and indefinite work;
• the employer can elect to offer (or not offer) work;
• the employee can elect to accept or reject any offer of work;
• the casual loading is specified; and
• there is a clear statement that the casual loading is to compensate the employee for the following entitlements (to which the employee as a casual is not entitled):
  • paid annual leave;
  • paid personal/carer's leave;
  • paid compassionate leave'
  • payment for absence on a public holiday;
  • payment in lieu of notice of termination;
  • redundancy pay,

the employee will be a casual employee.

The changes have retrospective effect and apply to all casual employment agreements with the above features.

See our Insights: Industrial relations reform bill introduced by Federal Government and Permanent casual – like smart casual, a very ambiguous category for further information.