The volatility of business continues to increase in this fast pace world of modern commerce and disruption. It is therefore understandable that many businesses require a flexible work force to buffer against the effects of uncertain work flows. The use of casual workers provide that flexibility however we must be careful not to entrench these arrangements when the work is no longer casual.
The advent of new workplace laws dealing with casual conversion, potential class actions and recent Court decisions have required us to revisit our approach to hiring employees on a casual basis.
By 1 October 2018 many modern awards will have a new casual conversion clause incorporated which provides for the right of a casual employee to convert to permanent employment after 12 months’ employment where the casual employee works on a regular and systematic basis. The right to conversion may be rejected by the employer where the conversion would require a significant adjustment to the employee’s hours of work, or it is known or reasonably foreseeable that the employee’s position will cease to exist, the hours of work will be significantly reduced or there will be a significant change in the days and times of work within the next 12 months.
It was reported recently that class action law firms are being funded by litigation funders to pursue class actions against labour hire firms to recover leave, right to notice and other entitlements on behalf of casual workers who should have been categorised as permanent employees.
When are you no longer a casual employee?
Whether or not the right of an employee to convert to a permanent position under a modern award applies or not, it is crucial that a business review its casual employee roster to determine whether they may be now considered permanent employees. It is likely casual employment no longer exists when:
- There are regular patterns of work;
- There is certainty as to the period over which employment is offered;
- There is continuity of work so that there is a mutual expectation that the employment was continuous and not end at a particular time; and
- The work was not intermittent or unpredictable.
The Consequences of No Longer being a Casual
An employer may be liable to pay additional amounts regarding annual leave entitlements, long service leave, personal leave, sick leave, and compensation for the lack of notice on termination. Additionally, the employer may be liable for penalties arising from the failure to pay work entitlements required under the Fair Work Act.
What to do now?
The key takeaways from this article are:
- If you are employing casual employees please ensure you review the arrangements to ensure that they are not considered to be permanent employees under the law.
- If you are acquiring a business which employs casual staff, you will need to investigate the nature of the employment arrangements because if they are deemed to be permanent employees you may be exposed to greater employee entitlement liabilities and claims.
Director – Corporate and Commercial
A+F Commercial Lawyers offers specialist legal advice to assist in the establishment, expansion, operation and divestment and acquisition of businesses and corporate groups.