Employers: What Does the Fair Work Amendment Mean for You?
On 26 March 2021, the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 amended the Fair Work Act 2009. The purpose of the amending legislation is to create more flexibility for employers to get back on track in the context of the current recession. However, there are some important amendments for employers to be aware of. It requires all employers to provide casual employees with a Casual Employment Information Statement, legislates the definition of “casual employee”, and creates a pathway for casual employees to become a full-time or part-time employee.
New Definition of Casual Employee
Section 15A outlines that a person is a casual employee if they accept an offer of employment on the basis of no advance firm commitment to continuing and indefinite work according to an agreed pattern of work. Only a limited number of considerations can be used to assess whether commitment for continuing and indefinite work was made or not.
- 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.
The section also specifically notes that a regular pattern of hours alone will not suffice to find a firm advance commitment to continuing and indefinite work according to an agreed pattern of work. Regard can only be had to the stipulations of the initial employment contract, and not subsequent conduct.
New Casual Loading Requirements in Wages
The loading amount in lieu of entitlements for casual employees should be an identifiable component of the wage. However, as many employers pay casual employees a lump sum wage, the proportion of the wage that reflects loading may not be clearly identified. In these circumstances, casual employees may have grounds to make a claim for entitlements. As this is a new Act, Australian courts have not yet interpreted what is required to be expressed in the casual employee’s payment rate for the amount pertaining to casual loading to be identified. Yet, if a claim is successful, the court must reduce any amount payable by the employer to the employee for the relevant entitlements by an amount equal to the loading amount. In other words, where there is an identifiable amount paid to casual employees in lieu of entitlements, the amending legislation provides for offsetting the amount of the entitlement against the amount of the claim. Thus, the amount that employers will be required to pay to an employee in the event of a claim may be reduced by entitlements already paid. For the employee to refute any offsetting decided by the court, only particular considerations relating to fair work instruments or the employment contract will be accepted.
Relevant Entitlements to be Reflected in Loading
Relevant entitlements include all entitlements reflected in the National Employment Standards, a fair work instrument or the employment contract. It also includes:
- Paid annual leave;
- Paid personal or carer’s leave;
- Paid compassionate leave;
- Payment for absence on a public holiday;
- Payment in lieu of notice of termination; and
- Redundancy pay.
Best practice moving forward will be for employers to specifically identify the inclusion of entitlements in casual employee wage.
If you would like assistance in assessing your current employee entitlements, casual loading requirements, and risk of claim by your employees, contact one of our experienced employment lawyers at (02) 4929 7002, email us or complete an enquiry form.