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:
Definition of casual employee
A person will be a casual employee if they are:
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:
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:
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:
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:
which cannot be accommodated within the days or times the employee is available to work during that period;
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 email@example.com