The Federal Government is set to introduce a highly anticipated reform of industrial relations laws following a recent case that is now set to appear before the High Court of Australia. The new reforms include arrangements in relation to casual employees that are aimed at circumventing the ‘double dipping’ concern following the case of WorkPac Pty Ltd v Rossato. In this blog, we review the changes to the industrial relations laws and outline the case that lead to this controversial decision.
On 9 December 2020, the federal Government announced the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020. The reforms include an arrangement for casual workers that could bestow upon them stronger rights for ongoing employment. However, it also limits the liability of employers for paying casual leave loadings as well as paying other benefits such as annual leave.
One key change is the introduction of a legal definition of ‘casual work’ under the Fair Work Act. It is worth noting that no definition currently exists in the Act and this definition could help clear up much ambiguity regarding the implication of casual working arrangements.
The Act will define a casual employee as a person who:
(a) is made an offer of employment by the employer on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work; and
(b) the person accepts the offer on that basis.
Moreover, the changes also mandate that an employer must make a permanent part-time or full-time job offer to a casual employee with a regular pattern of hours if:
(a) the employee has been employed by the employer for a period of 12 months from the day the employment started; and
(b) during at least the last 6 months of that period, the employee has worked a regular pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to work as a permanent full-time or part-time employee (as the case may be).
However, the employer is not required to make this offer if (based on facts that are known or reasonably foreseeable at the time) they have reasonable grounds not to make the offer.
These proposed amendments will not be voted on until 2021.
WorkPac Pty Ltd v Rossato
The changes introduced by the Federal Government come after much concern for the financial welfare of Australian businesses following a recent decision by the Full Federal Court in the case of WorkPac Pty Ltd v Rossato. To read more about this case, read our article linked here.
The High Court of Australia has allowed WorkPac Pty Ltd special leave to appeal the decision of the Full Federal Court. The decision is not set to be handed down until mid-2021.
The Federal Government has said that the proposed amendments will address the ‘double- dipping problem created by the Rossato decision’, so casual workers will not be entitled to both the 25% casual loading as well as the permanent benefits package (comprising annual leave, personal leave, notice of termination or redundancy pay).
Get legal advice
With many ambiguous changes to employment law set to be introduced in the coming year, it is important to seek legal advice if you are unsure about your employment contract or concerned about your potential liability as an employer. You can contact the highly skilled employment law team at Etheringtons solicitors via our contact form or call 02 9963 9800 for a no-obligation discussion.