High Court clarifies casual employee classification

Posted By Chris Delaney / Uncategorised / No Comments

In early August 2021 The High Court has unanimously lower Court decisions in WorkPac Pty Ltd v Rossato, providing greater clarification around Casual employment.

The Fair Work Act 2009 (Cth) (FW Act) and modern awards, provide a 25% loading for Casual employees to account for the annual leave, personal leave, notice of termination and redundancy pay.

In Workpac Pty Ltd v Rossato and earlier Workpac v Skene the Courts directed Workpac to provide annual leave and personal leave on top of the 25% deeming the employees to be permanent – what became known as a “double dip”.

The High Court overturned Workpac v Rosatto and in so doing confirmed that the test for determining the “casualness” of an employee was whether there was a “firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work”.

Coupled with the recent changes to the Fair Work Act 2009 this decision provides far greater clarity for both employers and employees entering into casual work arrangements.

The new legislation regarding casuals commenced on 27 March 2021 and provides:

  • a definition for casual employees into the Fair Work Act 2009 (Cth) (FWA) for the purpose of entitlements in the National Employment Standards (NES);
  • a protection for employers from double dipping claims by casual employees who claim they were misclassified and are entitled to permanent employment entitlements;
  • the requirement for employers to give each casual employee a copy of the new Casual Employment Information Statement; and
  • an express obligation for employers to offer eligible casuals conversion to permanent employment, while also allowing eligible casual employees to make requests to convert to permanent employment.

Definition of casual employee 

A person will be a casual employee if they are:

  • offered employment on the basis that the employer makes “no firm advance commitment to continuing and indefinite work”;
  • the person accepts such offer; and
  • the person is an employee as a result of that acceptance.

This means that the determination of whether a person is a causal employee or not will occur at the point of offer and acceptance of employment.

The FWA also provides a list of considerations a Court must have regard to when determining whether a firm advance commitment to continuing and indefinite work exists:

  • whether the employer can elect to offer work and whether the person can elect to accept or reject work;
  • whether the person will work as required according to the needs of the employer;
  • whether the employment is described as casual employment; and
  • whether the person will be entitled to a casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument.

No more “double-dip”

In the event that a casual in receipt of the 25% casual loading is determined by a court to be a permanent employee, employers have the right to offset any “relevant entitlements” owed to the employee, to against the 25% casual loading, including:

  • 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; and
  • redundancy pay.

Casual Conversion

Under the FWA employers must make an offer to convert a casual employee to either full-time or part-time employment (depending on their regular work patterns) if the employee:

  • has been employed by the employer for 12 months; and
  • during at least the last six months, has worked a regular pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to work as a full-time or a part-time employee (as the case may be).

However, employers are not required to make an offer if there are “reasonable business grounds” to not do so.

Reasonable business grounds employers can rely on include:

  • the employee’s position will cease to exist in the period of 12 months after the time of deciding not to make the offer;
  • the hours of work which the employee is required to perform will be significantly reduced in that period;
  • there will be a significant change in either or both of the following in that period:
    • the days on which the employee’s hours of work are required to be performed;
    • the times at which the employee’s hours of work are required to be performed;

which cannot be accommodated within the days or times the employee is available to work during that period;

  • making the offer would not comply with a recruitment or selection process required by or under a law of the Commonwealth or a State or a Territory.

At employment the employer must give the employee a “Casual Employee Information Statement”.

What Employers should do:

Provide all casual employees with a new contract of employment that include at least the following:

a clause that specifically states that there is no firm commitment by the employer to offer continuing or minimum days and/or hours of work;

a clause that separately identifies the casual loading amount (e.g. 25%);

a clause that shows what the loading is for e.g. annual leave personal leave – as described in the legislation; and

a clause allowing the employer to set off the 25% casual loading against any award of leave provisions etc.

 

For more information contact the Workplace Relations Speicalists admin@workplacerelationsspecialists.com.au

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Can an Employer direct an employee to have a 19 Vaccination against COVID 19?

Posted By Chris Delaney / Uncategorised / No Comments

The Commonwealth Government has announced the commencement of the COVID 19 Vaccination rollout across the country. Some members of the community will line up willingly and some will not.

As there are no new laws or public health orders, employers will not have the right to direct employees to have the COVID-19 vaccination or for that matter the Flu vaccination.

Employers should communicate with employees that they strongly encourage everyone to get vaccinated when it becomes available to them. They should also state that any employee with issues or concerns should discuss these with a nominated person (e.g. manager) in the organisation.

Employers should also encourage employees to consult with a qualified medical professional to assist with making an informed decision.

Although an employer may take disciplinary action up to and including dismissal should an employee refuse to follow a lawful and reasonable direction, there will be few situations to support such actions for refusal to be vaccinated.

Standing down employees who refuse to have the vaccination or refuse to work alongside an employee who has not been vaccinated is not an available remedy.

Before an employer makes a decision to direct employees to be vaccinated they should consider carefully the grounds on which they will rely for giving the direction.

  • Does the employee work with people who would be vulnerable to severe disease if they contract COVID-19?
  • Does the employee work in high-risk areas e.g. Hotel quarantine?
  • Is the vaccination essential for the performance of the work?
  • Is there a genuine reason why the employee refuses to have the vaccination?
  • How will the refusal affect the work, health and safety responsibilities of the employer?
  • Are there opportunities to redeploy the employee to alleviate safety issues?

An employee may be dismissed for refusal to follow a lawful and reasonable direction, however an employer may also be expected to prove that the direction was lawful and reasonable or the dismissal may be deemed unfair.

It should be remembered that the COVID 19 Vaccination is only one of the control measures employers should have already implemented to ensure a safe and healthy workplace.

For more information contact the Workplace Relations Speicalists admin@workplacerelationsspecialists.com.au

 

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Ordinary and Customary Turnover of Labour – Redundancy

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Ordinary and Customary Turnover of Labour – Redundancy

After a long struggle to overturn crucial court decisions on redundancy payouts, Spotless’s final opportunity ended on December 11, 2020 when the High Court rejected its bid for special leave to appeal.

The High Court’s decision makes it necessary that to establish ordinary turnover of labour, employers must prove that the affected employees understood that the contract may end and that they had no reasonable expectation of continuing work beyond the contract with the client. If not entitlements to redundancy pay would apply.

Section 119(1)(a) of the Fair Work Act 2009 provides an opportunity for employers to avoid redundancy payments where employment ends due to “Ordinary and customary turnover of labour”. The most important factor to be considered is if the employees knew, or could reasonably have known, that when the contract with the client ends their employment may also end.

Contracts end

The private security industry, in many instances, relies on fixed term contracts with clients and engage staff specifically to work on many of those contracts. Very often, nearing the completion of the contract period clients will not automatically renew, instead, putting the contract out to tender or going to the market seeking a better arrangement.

When the contract is lost and a new contractor has been procured by the client it may bring into play the exception available in Section 119(1)(a) but that is not automatic and will – if challenged – be considered by courts having regard to multiple factors.

In some cases the new contractor will provide employment to the ‘old’ contractor’s displaced employees. Unless the old contractor has “obtained” jobs with the new contractor redundancy may still apply. These situations are rarely simple.

Key message for employers

  • The exception is generally relied upon where an employee’s continued engagement is based on the employer retaining a particular contract. Loss of te contract may bring termination of employment. However, it depends on the facts and circumstances of each dismissal and the features of the employer’s business.
  • Ensuring the contract of employment clearly states that continued employment is dependent upon the employer retaining a particular contract and that the employee will not be entitled to redundancy pay if their employment is terminated due to the loss of that contract is imperative.

There are other matters that must be addressed when contracts cease and employees face the loss of their jobs.

Employers should:

  • Seek professional advice to ascertain if Section 119(1)(a) of the Fair Work Act 2009 provides an exemption in the particular circumstances;
  • Consult with employees, both collectively and individually, as soon as reasonably practical once it is kown that the contract may cease.
  • Give reasonable notice to employees and/or their representatives;
  • Explore genuine alternative options for redundancy, such as redeployment or relocation;
  • Ensure such options are fairly offered to the affected employees;
  • Provide at least the NES standard redundancy benefits;
  • Provide appropriate ancillary services, such as time off to seek alternative work (this is generally an award provision), retraining opportunities etc.
  • Ensure employees nominated for redundancy are fairly selected on an objective and unbiased basis.

The issues facing both employers and employees affected by the loss of a contract are complex. In such situations employers would be well advised to anticipate the likely outcome before the contract period is due to end and seek professional advice to ensure that they are ready to deal with any issues that may arise.

For more information contact the Workplace Relations Speicalists admin@workplacerelationsspecialists.com.au

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