If you employ casuals, this is a ‘must read' piece.
The fallout from the ongoing Workpac matter in the Commission continues to have impacts particularly in relation to the Decision in the Rosato case and casual employment. I have seen a flurry of recent blogs from legal practitioners following on from this Decision which frankly to my mind are more designed to put the ‘frighteners' on employers rather than providing any clear direction.
The reality is that the Federal Government is under enormous pressure to affect changes to the legislation to provide clarity around casual employment so knee jerk reactions now would be unwise in my view. Waiting for a few weeks for the dust to settle before taking any action, if required, is not going to negate any potentially ‘unlawful’ practices that currently exist in relation to casual staff. Any moves to sanction employers in the wake of the mass shutdowns following Corona Virus would be catastrophic, we are not talking about just a few businesses here, roughly 20% of the Australian workforce prior to Corona were casualised.
Notwithstanding the above, there are a number of issues that need to be considered. Prime amongst these is the right of worker to be treated as a casual employee in the first place. There are tens of thousands of businesses across the country who engage staff on a casual basis whose employees actually prefer to be employed on a casualised basis because they like being paid at a higher rate of pay and enjoy the flexibility of choosing when to work. My own daughter was a ‘casual’ employee working fulltime hours, in her case she actually preferred this. So, one conundrum for law makers is dealing with employees who wish to retain their ‘casual’ status without potential repercussions in terms of employers perpetuating ‘unlawful’ practices. How will an employer ‘force’ an employee to become part time without, for example, falling foul of anti-discrimination laws or bullying and harassment claims?
Certainly, there are also employees out there who patently have never been given the option – as they have a right to do – to transition to permanent employment based on their work pattern over the past 12 months and ongoing expectation of work. I am still horrified at the number of SME’s who have never actually taken the time to read the Award(s) which cover their operations and educate themselves on their obligations with things like casual employment. I still see employment ads that call for ‘permanent casual’ positions, itself a conflict in terms that, in the current situation is fraught with risk.
In both the State and Federal systems casual employment is defined as being both ‘irregular’ and ‘unpredictable’ employment. Even where an employer can argue that the days of work are not predictable anyone working reasonably regular hours cannot legitimately be deemed to be casual.
This is without considering highly seasonal industries like Hospitality or Restaurant who are looking for flexibility in their ability to deploy staff. Of course, one of the biggest preventers of deploying ‘casual’ staff into permanent part time are the restrictions that the bulk of Modern Awards place on employers. Unlike many State Awards, most Modern Awards require you to agree, in advance, on the specific hours and days to be worked and any variation to those hours must be agreed in writing and even then, you are supposed to pay penalty rates for those varied hours. Is it any wonder that so many employers default to casual employment to avoid this? By allowing part time employees to flexibly work other hours and on other days with all such hours up to 38 being paid at ordinary rates of pay would, in my view, make it so much more attractive to engage part time staff. Employers at the moment are in a “damned if they do, damned if they don’t” situation exacerbated by Decisions like the Rosato matter.
So, in the meantime, what should you do?
- Read your Award and get to grips with what your obligations are in terms of casual employees and their right to transition to ‘permanent’ employment.
- Remember that you have the right to refuse a transition to permanent employment on ‘reasonable operational grounds’ and these must be stated in writing.
- Assess your workforce, are your casual employees really casual? This will inform you as to your risk exposure depending on what happens with legislation.
- Critically review your casual employment documentation. Amongst other things make sure it specifically states that the employee is being paid a casual loading percentage in lieu of any entitlement to all paid forms of leave. Also, that they have the right to refuse work where offered.
- Make sure you have a letter from each casual employee that states their preference to remain being employed on a casual basis to receive the higher rate of pay and thanking you for your offer of part time employment. Make sure that the letter acknowledges that they understand they are being paid a casual loading in lieu of entitlement to all paid forms of leave (other than LSL) and that if they change their mind, they will let you know. Give them a copy and keep the original on file. This will at least give you something defensible until we get clarity around this matter.
- Don’t panic! And don’t be bulldozed by your IR provider into wholesale rewriting of contracts at this stage. The dust has not even begun to settle on this matter and we can expect further developments as pressure from employer groups on the Federal Government ramps up.
In the meantime, keep yourself informed with developments and review your employment practices going forward. Speak to other business owners and do remember to speak with your IR/HR provider as we try to keep up with the changes and provide some clarity around this matter as it develops.