Jobs and Industrial Relations Minister, Kelly O’Dwyer, has announced new regulations and legislation under the Fair Work Act 2009 (Cth) to address ‘double dipping’ claims by casual employees and casual conversion rights.
Double dipping regulation
Ms O’Dwyer announced a new Fair Work Act 2009 (Cth) regulation to protect employers from ‘double dipping’ claims made by casual employees found to be permanent employees. This announcement follows the Full Federal Court’s decision in WorkPac Pty Ltd v Skene that determined a casual employee of WorkPac was improperly characterised as a casual employee and was therefore entitled to paid annual leave and other permanent benefits despite being paid a 25% casual loading.
Ms O’Dwyer said (as reported in The Australian Financial Review):
Every employer must comply with their legal obligations, but being forced to pay for entitlements twice is unfair and potentially crippling for many small businesses.
It is critical that small and medium sized businesses have the confidence to invest in their business and employ people.
The proposed Fair Work regulation will come as a relief to employers as it will materially reduce the risks to employers affected by the Skene decision by preventing casual employees from double dipping.
However, it is likely that the proposed Fair Work regulation will be hotly contested by unions and the Labor Party.
Casual conversion legislation
Ms O’Dwyer also announced that legislation will be introduced to address casual conversion rights in the National Employment Standards.
This announcement follows the new casual conversion clauses inserted into modern awards, effective from 1 October 2018, providing regular casual employees with the right to request to convert to permanent part-time or full-time employment.
The casual conversion clause in the modern awards provides:
- A regular casual employee is a casual employee who has in the preceding period of 12 months worked a pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to perform as a full-time employee or part-time employee.
- There is no obligation on any employee to convert or for an employee to be offered additional hours of work.
- Requests to convert to permanent employment must be made in writing and can only be refused on reasonable business grounds.
- Employers must respond to an employee in writing within 21 days of receiving a request to convert to permanent employment.
- Disputes about casual conversion will be dealt with under the dispute resolution procedures of the applicable modern award.
The proposed legislation seeks to extend the casual conversion rights to all casual employees through the National Employment Standards.
When can we expect to see these changes?
We will keep a close watch on the proposed double dipping regulation and casual conversion legislation and provide our readers with prompt updates.
If you would like to discuss the status of your casual employees, please contact our workplace relations and safety team.