LEGAL ALERT:PARLIAMENT MOVES TO RESTRICT CASUALS “DOUBLE DIPPING” AND TO PROVIDE CASUAL CONVERSION RIGHTS FOR ALL EMPLOYEES
Parliament moves to block casuals from “double dipping”
Following the Federal Court’s decision to award paid annual leave to a casual employee, see our previous legal alert “Regular Casual Employees Entitled to Annual Leave“, Federal Parliament has announced a regulation to be included in the Fair Work Regulations 2009 that is intended to minimise the impact of such claims.
Many employers remain concerned that the Federal Court’s decision makes way for longstanding ‘regular’ casual employees to claim paid annual leave, despite receiving the casual loading during their employment. IR Minister Kelly O’Dwyer has announced this regulation in an attempt to protect employers from such claims.
The regulation will allow employers to off-set the casual loading paid to an employee against any claim for paid NES entitlements, such as annual leave. Minister O’Dwyer said that “employers must comply with their legal obligations, but being forced to pay for entitlements twice is unfair and potentially crippling for many small businesses.”
This regulation will apply if the following conditions are met:
- a person is employed by an employer on the basis that they are a casual employee;
- the employer pays the person an amount (the loading amount) that is clearly identifiable as an amount paid to compensate the person for not having one or more relevant NES entitlements during a period (the employment period), typically known as a casual loading;
- during all or some of the employment period, the person was in fact an employee other than a casual employee for the purposes of the NES; and
- the person makes a claim to be paid an amount in lieu of one or more of the relevant NES entitlements, that is, the person claims NES entitlements that a person other than a casual is entitled to (i.e. an ongoing full-time or part-time employee).
The regulation takes effect on 18 December 2018 and applies to employment periods before and after the regulation is made.
Once the regulation is made, it can be disallowed by either house of Parliament, but this cannot happen until the New Year. It is not law at this time.
Casual conversion right to be included in NES
The Federal Parliament intends to amend the NES in the Fair Work Act 2009 to provide the right for casual employees to request to convert their employment to part-time or full-time.
Following the recent casual conversion amendments to modern awards by the Fair Work Commission, see our preivous legal alert, “Casual Conversion Rights to be Included in Awards“, the government intends to extend similar casual conversion rights to all employees.
Importantly, employers will be able to refuse the request for part-time or full-time employment on reasonable business grounds. Reasonable grounds to refuse a request may include:
- Where it would require significant adjustment to the employee’s hours of work to be engaged full-time or part-time under the relevant award;
- Where it is known or reasonably foreseeable that the employee’s position will cease to exist within the next 12 months;
- Where it is known or reasonably foreseeable that the hours of work which the employee is required to perform will be significantly reduced in the next 12 months; or
- Where it is known or reasonably foreseeable that there will be a significant change in the days or times at which the employee’s hours of work are required to be performed in the next 12 months that cannot be accommodated within the days or hours during which the employee is available to work.
Once the Bill is released, we will provide further details.