Martina Hegarty

Significant changes for regulation of casual employees

Important amendments have been made to the Fair Work Act 2009 (Cth) (the Act) which introduce new workplace rights and obligations with respect to casual employees. These changes came into effect as of 27 March 2021, following the enactment of the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020.

Meaning of ‘casual employee’

Following these changes, the Act now defines a ‘casual employee’ as someone who accepts an offer of employment from an employer on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person (the ‘Firm Advance Commitment’). The Act sets out various factors which must be exclusively considered in determining whether the employer makes a Firm Advance Commitment. It also states that a regular pattern of hours does not of itself indicate a Firm Advance Commitment.

Importantly, the question of whether a person is a casual employee is assessed based on the offer and acceptance of the offer of employment, and not on the basis of any subsequent conduct of either party. Also, a casual employee will remain casual until they are converted to permanent employment, or the employee accepts non-casual employment by the employer and commences work on this basis.

Offers for casual conversion

Employers (other than small business employers[1]) are required to make written offers to casual employees for them to convert to permanent employment if:

  1. the employee has been employed for 12 months; and
  2. 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 full-time employee or a part-time employee (as the case may be).

Employees who have worked the equivalent of full-time hours during that previous six month period must be offered full-time employment, whilst those who have worked less than full-time hours must be offered part-time employment that is consistent with the regular pattern of hours worked.

The Act states that an employer is not required to make such an offer if there are reasonable grounds not do so, which are based on facts that are known, or reasonably foreseeable at the time of deciding not to make the offer. Examples of such reasonable grounds are set out in the Act.

Various requirements apply to the notification of such offers (and non-offers), and the acceptance of such offers.

The Act also creates a right for casual employees to request conversion in certain circumstances, and employers are only able to refuse such requests on reasonable business grounds, and following consultation with the employee.

Employers should also ensure compliance with any awards or industrial agreements that provide for a more generous casual conversion entitlement.

Casual Employment Information Sheet

Employers will be required to provide all casual employees with a Casual Employment Information Sheet. This must be provided before, or as soon as possible after the employee starts their job.

Casual loading offset

Where an employee makes a claim for entitlements during a period of employment in which they were not a casual employee, the Act allows a court to ‘set off’ any identifiable casual loading that was paid to that person during the relevant period. This prevents an employee from ‘double dipping’ with respect to such payments. The claim for entitlements can include claims for annual leave, personal leave, compassionate leave, public holiday pay, payments in lieu of notice or redundancy pay.

Disputes

The Act also creates a pathway for parties to resolve disputes about the operation of these provisions. If a dispute cannot be resolved at the workplace level, it can be referred to the fair Work Commission.

Next steps for employers

As a result of these new laws, employers should take steps to:

  • Review the terms and conditions on which you engage casual employees, including the manner of engagement. In particular, it will be important to ensure that contracts of employment for casual employees clarify the basis of the employment, and clearly establish the loading component of a casual employee’s hourly rate of pay.
  • Consider any obligations you have to offer casual employees conversion to full-time or part-time employment.
  • Ensure that casual employees are provided with the Casual Employment Information Sheet.

 

The information in this article is for information purposes only and does not constitute legal advice. You should obtain specific advice relevant to your circumstances.

[1] I.e. employers with a headcount of less than 15 employees

Sick pay for Victorian casual workers

Earlier this week, Premier Daniel Andrews announced the introduction of the “Secure Work Pilot Scheme” under which casual or insecure workers in certain industries will be entitled to five days’ sick and carer’s pay at the national minimum wage.

The scheme is set to come into effect in late 2021 or early 2022 and will initially be funded by the State government before relying on an industry levy.

The driving force behind the scheme was the COVID-19 pandemic, which exposed problems around casual workers continuing to work when unwell to avoid loss of income.

The scheme will be aimed at sectors where insecure work is common, such as hospitality, private aged care and security work, with the final list of sectors yet to be determined.

Whilst this may be positive news for casual workers in Victoria, it has raised concerns for employers around the increasing costs associated with casual workers, with businesses set to fund the scheme in the long run.

 

The scheme is yet to be finalised so watch this space.

Workdynamic Australia announced as Employment Specialist Firm of the Year at the 2020 Australasian Law Awards.

We are delighted to share that Workdynamic Australia has been named as the winner of the Employment Specialist Firm of the Year in the 2020 Australasian Law Awards.

These awards showcase achievements across the legal profession in Australia and New Zealand. Winning this award is a highly prestigious accolade and reflects the continuing growth of the firm, after having been named as a finalist in 2015, 2016, 2017, 2018, and ‘Highly Commended’ finalist in 2019.

This recognition celebrates our growth as a firm, and our achievements in the face of what has been a challenging year for all. Our thanks go out to our wonderful staff, and our amazing clients, without whom all of this would not have been possible. We are proud that our values and culture as a firm that ‘does things differently’ is recognised and rewarded by the wider profession.

Our Team

Since its inception in 2013, Workdynamic has continued to expand, develop, and strive, and now boasts 33 staff members. The firm is headed by Lauren Barel, Jonathan Wright, Jane Wright, Kathy Dalton and Kate Peterson, who each worked in Australia’s leading employment law practices for over a decade before founding or joining Workdynamic.
Our directors are supported by a skilled team with extensive experience in industrial and employment law, mediation and conciliation services, and in conducting investigations for a broad range of private, government and not-for-profit organisations. We have staff permanently located in New South Wales, Victoria and Queensland.

Some of the Team at our Christmas 2019 lunch

Our Clients

Workdynamic’s clearest success is reflected in our enduring relationships with clients. A key part of our Award submission was to point to the confidence and trust we have built with clients. For example: “impressed with their professionalism, expertise and more importantly true partnership and understanding of our business needs. They have adapted to our requests and provide onsite support, coaching and training in addition to their legal advice. Just brilliant, thank you!
Our knowledge and commerciality is demonstrated by repeat instructions and an expanding client portfolio, servicing clients throughout all of Australia’s states and territories, as well as New Zealand.

We pride ourselves on delivering excellence in customer service, consistent quality, effective communication, responsiveness and flexibility, and value for our clients.

Click here for more information on our services and team.

High Court overturns leave decision

A decision has been made in the High Court today (13/08/2020) to reject unions’ arguments that shift workers that work longer than standard hours are entitled to additional paid personal/carer’s leave each year.

This decision overrules the Federal Court decision, handed down on 21 August 2019, which stated that shift workers should accrue paid leave based on the length of their shift, allowing 12-hour shift workers to accrue 120 hours of paid personal leave per year, as opposed to the standard 76 hours, based on a 7.6-hour working day.
Today, the High Court stated that, for the purposes of s96(1) of the Fair Work Act 2009 (Cth), it is “notional”, with a ‘day’ amounting to one-tenth of the equivalent of an employee’s ordinary hours of work in a two week period.

“The ‘working day’ construction adopted by the majority in the Full Court (and urged by the union parties in this Court) is not consistent with the purpose of s96 or the stated objectives of the Fair Work Act of fairness, flexibility, certainty and stability.”

In essence, this decision ensures equality among employees, regardless of hours worked. This will have implications for employers and employees particularly in the mining, construction, manufacturing and medical industries, which are highly dependent on shift workers.

Impact of Stage 4 restrictions on Victorian employers

With the introduction of Stage 4 restrictions in Victoria, employers are facing additional requirements if they are to continue operating.

Whilst some businesses will be required to completely stop their operations, others will be allowed to continue operating, subject to additional obligations, including having in place a COVID Safe Plan.

A COVID Safe Plan, which will need to be updated regularly, must set out:

  • the employer’s actions to help prevent the introduction of coronavirus in their workplace
  • the level of face-covering or personal protective equipment (PPE) required for their workforce
  • how the employer will prepare for, and respond to, a suspected or confirmed case of coronavirus in the workplace

In addition to having a COVID Safe Plan, businesses permitted to operate during Stage 4 restrictions will also need to:

  • ensure employees work from home where possible
  • collect records of all workers, subcontractors, customers and clients who attend the work premises for 15 minutes or longer (certain exemptions will apply)
  • ensure there are four square meters per one worker in enclosed workspace or in shared areas
  • ensure that workers do not work across multiple sites or for multiple employers (subject to exemptions)
  • report any positive cases of coronavirus to DHHS, Worksafe, Health and Safety Representatives as well as notifying the workforce
  • regularly clean facilities and shared spaces
  • undertake risk assessments for cleaning and the potential closure of the workplace

Premier Daniel Andrews announced today that those employees who will be deemed as essential workers and who will continue attending their place of work, will need to carry permits signed off by their employer. The permit paperwork is expected to be made available online later today.

The Federal Government also announced that a $1,500 “disaster payment” will be available for workers who are required to self-isolate because of coronavirus but who do not have leave entitlements. For now, the payment will only be available to Victorian employees and workers will be able to apply for the payment from tomorrow.

If you require any assistance in navigating the new restrictions, please do not hesitate to contact us.

 

Redundancy pay and the reduction of an employee’s hours of work

Broadlex Services Pty Ltd v United Workers’ Union [2020] FCA 867

The Federal Court has clarified, on appeal, a grey area for employers as to whether an obligation to pay redundancy entitlements is triggered in circumstances where an employee continues their employment with the same employer, however, on substantially inferior terms.
The Federal Court has held that where an employer imposes a unilateral amendment to the terms of an employee’s employment that places the employee in a substantially inferior position, the employer will not be able to rely on the fact that the employee acquiesced to the amendment after it was imposed on them to successfully argue:

  1. the employment relationship endured after the amendment;
  2. the employee’s employment was not “terminated” for the purpose of s 119(1) of the Fair Work Act 2009 (Cth) (FW Act); and
  3. the amendment did not give rise to a redundancy entitlement under s 119 of the FW Act.

Employers should take heed that keeping an employee’s employment on foot, but on substantially inferior terms, will trigger the obligation under the FW Act to provide the employee redundancy pay if the amendment to the employee’s conditions of employment has not been achieved through genuine agreement.

The decision is timely, as many employers in the current COVID-19 pandemic environment grapple with a growing need to reduce employees’ hours and pay, assign them to different roles, etc.
It is worth noting that the Federal Government’s JobKeeper scheme, currently permits eligible employers in certain circumstances to issue a direction to eligible employees, requiring them to work reduced hours for a certain period. The decision is relevant for employers who are seeking to make changes not covered by the JobKeeper scheme.

Background to the Appeal

From 1 May 2014, Ms Brizitka Vrtkovski was employed by Broadlex Services Pty Ltd as a full-time cleaner.
On 15 August 2017, following a reduction in demand for cleaning services from one of Broadlex’s clients, Ausgrid, Broadlex informed Ms Vrtkovski that:

  1. it had made the decision to reduce her hours of work from full-time to part-time having considered its ‘work flow’; and
  2. the change would take effect from 12 September 2017.

Ms Vrtkovski refused to sign a consent form to the change, however, began working the reduced hours from 12 September 2017.
United Voice (now the United Workers’ Union) brought proceedings against Broadlex on behalf of Ms Vrtkovski in the Local Court seeking redundancy pay for her and a declaration that Broadlex had breached the NES in accordance with s 119 of the FW Act.

The Local Court found inter alia there was no express support in the authorities for Broadlex’s argument that:

  1. an employee is only entitled to redundancy pay under s 119 of the FW Act if the employment relationship has been terminated; and
  2. the employment relationship between the parties continued despite the reduction of Ms Vrtkovski’s hours of work and her acceptance of that reduction.
The Federal Court Decision

Section 119(1) of the FW Act provides that an employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour.

In this case, Broadlex argued that Ms Vrtkovski was only entitled to redundancy pay if the employment relationship had been terminated. Broadlex submitted that because the employment relationship continued, that is, by Ms Vrtkovski continuing to perform work at the reduced hours, her employment, for the purpose of s 119(1) of the FW Act, had not been terminated, and accordingly an entitlement to redundancy pay did not arise.

As part of determining the case, the Federal Court closely considered what is meant by the phrase “employment is terminated” in s 119(1) of the FW Act, and how the phrase relates to the concepts of: an employment relationship, and a contract of employment.
The Federal Court decision ultimately confirmed an employment relationship does not endure where:

  1. an employer imposes a unilateral amendment to an employee’s employment that leaves the employee in a substantially inferior position; and
  2. the employee accepts that unilateral amendment.

Accordingly, the Federal Court held that Ms Vrtkovski’s employment was terminated by Broadlex for the purpose of s 119(1) of the FW Act, and given Broadlex no longer required her full-time job to be done by anyone, she was entitled to redundancy pay.

Lessons for employers

To minimise the risk of inadvertently triggering redundancy entitlements, employers are encouraged to enter into meaningful consultation with their employees regarding the need to vary the terms of their employment in response to operational needs in the current climate.

Where necessary, employers should be proactive in observing the requirements of applicable industrial instruments and seek professional advice before imposing any amendments.

How the University sector is responding to COVID-19

COVID-19 presents the University sector with a unique set of challenges.  These include staffing issues arising from a rapid transition to remote learning, funding shortfalls and proposed fee changes, and the different dynamics impacting local and international enrolments.  Workdynamic is keeping up to date on University employment strategies in this environment and working with a number of our University sector clients on both immediate and longer term approaches.  Some key recent developments include:

  • The University of Melbourne’s staff have rejected the variation proposal to permanently remove their latest pay rise and introduce voluntary redundancy packages.  The University has indicated they will instead move ahead with workforce reductions.
  • Staff at the University of Western Sydney have supported an application for a variation to their enterprise agreements to introduce a ‘banked additional leave’ scheme involving employees purchasing extra leave in connection with specific shutdown dates, in return for a University commitment not to stand down any employees through to the end of 2020.
  • Monash University, University of Western Australia and La Trobe have made similar commitments to achieve temporary cost savings with an assurance of no forced redundancies or stand downs.
  • We are awaiting the outcome of a University of WA vote on a variation to defer pay rises due in January, cancel payment of leave loading and to direct employees to purchase 19 days of additional leave, to be taken over the Christmas and New Year period.  The proposal, supported by the NTEU, is expected to be approved by employees.

Workdynamic congratulates Kate Peterson on her appointment as Director

Kate Peterson has been promoted to the position of Director at Workdynamic Australia.  Kate’s significant contribution as Executive Counsel over the past 3 years to the firm’s specialist employment law practice has been recognised by this appointment. 

“I am delighted to be commencing as a director at Workdynamic Australia, and look forward to continuing to work with clients and colleagues to strengthen our market-leading practice and our uniquely innovative and personable culture.” – Kate Peterson

Kate provides advice and representation for clients across a range of industries, and in matters requiring sophisticated strategic judgment and exceptional technical legal skills. Her outstanding knowledge and practical experience in workforce restructuring, including the successful planning of consultation, redeployment and redundancy processes in unionised sectors have benefited many Workdynamic clients.  Kate’s technical capability and interpersonal skills make her a sought after investigator, particularly in complex and sensitive matters.  A skilled litigator with experience in the conduct of complex Federal Circuit Court litigation and as an advocate in the Fair Work Commission and Coronial Courts, Kate is also a key part of the Workdynamic litigation team.

Kate commenced with Workdynamic Australia in January 2016.  She previously practised as a Senior Associate in the Workplace Relations team at Corrs Chambers Westgarth, and prior to that as a Workplace Relations and Safety Lawyer at Clayton Utz.

Kate’s outstanding experience in this specialist practice area is also reflected in her role as an Adjunct Lecturer teaching Advanced Employment Law and Workplace Investigations to postgraduate students at the University of Sydney.

Workdynamic also takes the opportunity to congratulate Kate on the birth of her first child in January 2019.  While Kate’s promotion to Director became effective during her parental leave,  we look forward to welcoming her return later in 2019 when she will resume her role in our leadership team. Until then the Workdynamic team can be contacted through any of the other Directors.