The complexities of long-term casual employment translates to ongoing difficulties in the Australian industrial relations landscape. At the time of writing, legislation is being debated in parliament to introduce sweeping reforms via the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020.
One of the primary aims of this bill is to ensure that all parties e.g. employers, employees, employer and employee associations and so forth, have a clear and concise understanding of the legal definition of casual employment and corresponding conditions.
How does this affect you?
Given the significance of this issue, the team at the APodA HR Advisory Service thought it pertinent to remind members of their existing obligations in the Health Professionals and Support Services Award 2020 (“HPSSA”). This award applies to the majority – if not all – employers and employees in private practice in Australia.*
*Excludes unincorporated entities in WA.
What is a casual employee?
First up, let’s revisit the definition of a casual employee. As per the HPSSA, a casual employee is engaged on an hourly basis rather than as a part-time, full-time or fixed-term employee. They can be engaged to work up to and including 38 ordinary hours per week – with a minimum engagement period of three hours. The most recognisable attribute that distinguishes casual employees is the 25% loading they receive – which is intended to compensate them in lieu of the paid leave entitlements of permanent employees.
Although not explicitly enshrined in law, it is commonly understood that casual employees are engaged on an as-needs basis and shouldn’t have any guarantee nor expectation of ongoing work. This is implied by the reference to casual employees being engaged on an 'hourly basis'.
What has made this issue prominent?
Complications have arisen in recent years for those employees who are engaged as casuals but work for their employers according to a regular pattern (and have done so for some time).
There has been an increasing opinion that these types of engagements do not align with the true nature of casual employment and that, in some cases, employers have been engaging individuals in this way to avoid paying leave entitlements and to make terminations easier.
In fact, there have been several recent high-profile cases – namely WorkPac v Skene (2018) and WorkPac v Rossato (2020) – where the courts assessed the relationship between employer and employee and determined that the individuals were not truly casual employees, despite their contracts saying so.
This resulted in adverse outcomes for these employers and sparked concerns amongst employers and employer associations that legal precedent is being set.
As with any legal proceedings, an important factor influencing the court’s decision is the individual circumstances at play. For this reason, it is critical employers in the podiatry profession understand these particular cases do not necessarily dictate what would happen if their business were to encounter a similar problem.
That said, it is important for employers to consider how these decisions may impact their casual workforce and make decisions if/as required.
Existing obligations to be aware of
The HPSSA allows regular casuals to request their employment be converted to permanent employment. A regular casual is defined as one who has worked a consistent pattern of hours which, without significant adjustment, they could continue to do as a permanent.
Whether or not they can convert to full-time or part-time employment will depend on the number of weekly hours they have regularly been working as a casual.
A practical solution to a challenge
A difficult question has arisen regarding long-term casuals who don’t wish to convert to permanency. Although the desire to remain casual is theirs, this cannot guarantee there may not be risks for employers later.
For this reason, the APodA HR Advisory Service recommends two key strategies to mitigate risk:
- Periodically offer the opportunity to convert to permanency in writing (ideally, every 12 months), and;
- List the 25% casual loading as a separate item on their payslip.
These two actions will protect an employer insofar as reasonably practicable from future risk. For instance, if a casual alleged they should have been treated as permanent and demanded leave entitlements retrospectively, these actions could act as part of an employer’s defence they have complied with the law by:
- Clarifying the intention of both parties with regard to the employee’s employment status, and;
- Compensated the employee financially with the casual loading
It is important we highlight that we cannot confirm how courts and/or industrial tribunals would view these actions. For example, we cannot guarantee they would entirely mitigate risk. However, we believe these to be the best tools given our current framework.
Looking to the future
The legislation currently before Parliament is seeking to insert a tighter definition of casual employment into the Fair Work Act as well as casual conversion provisions for award-free employees as well as award-covered employees.
As the situation progresses, the team at the APodA HR Advisory Service will ensure members are kept in the loop. Until then, we recommend employers review their current arrangements with casual employees in line with the information given here.
The material contained in this publication is general comment and is not intended as advice on any particular matter. No reader should act or fail to act on the basis of any material contained herein. The material contained in this publication should not be relied on as a substitute for legal or professional advice on any particular matter. Wentworth Advantage Pty Ltd, expressly disclaim all and any liability to any persons whatsoever in respect of anything done or omitted to be done by any such person in reliance whether in whole or in part upon any of the contents of this publication. Without limiting the generality of this disclaimer, no author or editor shall have any responsibility for any other author or editor. For further information please contact Wentworth Advantage Pty Ltd.
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