For many businesses, casual employment has been favoured for its flexibility and lower administrative burden however, the Australian Government has recently announced planned reforms to make it easier for some casual workers to convert to permanent employment if they choose.
Workplace Relations Minister Tony Burke announced “as part of the Government’s next set of workplace reforms we will close the loophole that leaves people stuck as casuals when they actually work permanent regular hours”, providing these people with increased job security. You can read the Minister’s media release here.
The Minister confirmed the changes would be taken to parliament later this year as part of a broader set of reforms, and while the full details have not yet been announced organisations should start to become aware of, and plan for, how this will impact their employees, their obligations and operational aspects of their business.
New Rights for Casual Workers
Under the Fair Work Act, employers (except small businesses) are currently required to offer casual employees’ conversion to permanent employment (be that full-time or part-time) if they’ve been employed for 12 months+ working regular shifts over the last 6 months. If an employer chooses not to offer this casual conversion, they must have reasonable grounds and it must be explained in writing.
A key component of the recent announcement is a new definition of casual work. Minister Burke indicated that the aim is to legislate a fair & objective definition to determine when an employee can be classified as casual.
According to the Fair Work Commission, a person is currently classified a casual employee if “they accept an offer for a job from an employer knowing that there is no firm advance commitment to ongoing work with an agreed pattern of work.” However, this definition has resulted in many employees becoming stuck in casual employment when the reality is they are working regular hours in a more permanent arrangement. These people are then missing out on the protections that come with a permanent role such as paid leave, notice of termination and job security.
The Minister also announced there will be a new pathway for eligible casual employees to seek permanency should they wish to, but no one will be forced to convert if they don’t want to.
How these changes might impact your business
Those people who are seeking that extra job security or paid leave arrangements will likely have a greater chance of success and with potentially more than 850,000 casual employees nation-wide with regular hours employers may see an increase in requests for casual conversion if these laws take effect.
The announcement confirmed that most of the existing framework will not change, including the process for offering eligible employees permanent work after 12 months, and any casual conversions that do occur will be effective from the date it occurs without involving backpay.
The cost of labour will end up being similar, with savings from the smaller per hour rate going towards employees leave, however businesses may now need to consider what impacts the changes will have on resourcing. For some industries, managing rostering and fluctuations in demand may become more difficult and impacts from overtime will need to be factored into operational planning. These impacts are most likely to be felt in industries like hospitality or retail that traditionally rely on casual labour.
Effective Communication during Workforce Changes
Clear and transparent communication with employees is essential during times of change. As news of the new rights for casual workers circulates in mainstream media, some employees may have questions or concerns. These queries should be proactively addressed, clarifying how the changes will be implemented and what they mean for your organisation and its workforce.
Introducing new rights for casual workers represents a significant development in Australian employment law. Staying well-informed about these changes is important. By understanding the eligibility criteria, striking the right balance between flexibility and compliance, and effectively managing workforce transitions, organisations can remain legally compliant and dedicated to encouraging a fair and supportive work environment for all employees.
Need help navigating HR changes in your workplace? Reach out for a chat with Zenith HR today. We’re here to help your business reach and sustain its zenith by creating meaningful, healthy, cohesive work cultures and relationships that foster performance and productivity.