The Omnibus Bill – Watered Down but Entrenching Casual Employment

8 April 2021
The Omnibus Bill, properly known as the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2021 in its first iteration, proposed a significant number of reforms to the Fair Work Act 2009 (Cth) (Fair Work Act). These reforms were employer centric and broadly anti-worker. Maurice Blackburn and our clients opposed the Omnibus Bill.

After a successful campaign by the Union movement, the Federal Parliament passed a watered-down Omnibus Bill.

The Omnibus Bill that was passed significantly reduced what was originally proposed and contained only the original Schedule 1. Schedule 1 of the Omnibus bill contains provisions relating to the definition of casuals, the conversion of casuals to permanent employees and dispute mechanisms relating to casual conversion.

The Fair Work Act amendments were assented to on 26 March 2021 and the watered down, (Schedule 1 only), Omnibus bill, is now in force.

Definition of ‘casual employee’ 

The newly inserted Section 15A creates a definition for a ‘casual employee’. Previously, the Fair Work Act did not contain such a definition, other than the now repealed ‘long term casual employee’.  

Section 15A (1) introduces three criteria which an employee must meet to be a casual employee, being:

  • an offer of employment made by the employer to the person is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person; and
  • the person accepts the offer on that basis; and
  • the person is an employee as a result of that acceptance.

15A (2) then provides an exhaustive list of considerations to have regard to when determining 15 A (1)(a), being:

  • whether the employer can elect to offer work and whether the person can elect to accept or reject work;
  • whether the person will work only as required;
  • whether the employment is described as casual employment;
  • 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 definition also confirms (at 15A (3)) that a regular pattern of hours is not in itself indicative of a firm advance commitment, and, (at 15A (4)) that an assessment of whether a person is a casual employee is to be made solely on the offer and acceptance of employment, and not on the basis of any subsequent conduct by either party.  We address our concerns regarding the new definition, below.

Impact of Casual Definition

In his second reading speech, the Minister for Industrial Relations stated that the casual definition provisions are in direct response to the decisions in WorkPac Pty Ltd v Skene [2002] FCAFC 84 (‘Skene’) and Workpac Pty Ltd v Rossato [2018] FCAFC 131 (‘Rossato’). Rossato is currently on appeal to the High Court of Australia.

Skene and Rossato confirmed that employees who work a regular pattern of hours with a firm advance commitment of work were incorrectly described as casuals, and are able to accrue and access entitlements such as annual leave and personal leave, pursuant to the FW Act, like any other permanent employee. 

The application of both Skene and Rossato, prior to the implementation of the casual definition, were to have a positive impact as many employers were required to review their workforce and assess if their long terms casual employees were in fact ‘other than casuals’, and, entitled to the same entitlements as permanent employees. It was hoped that the impact of these decisions would reduce casualisation in the Australian workforce.

However, the arguments advanced in Skene and Rossato in assessing if a worker is ‘other than a casual’, such as a regular pattern of hours, and, a firm advance commitment of work, are directly undermined by the new casual definition in the Fair Work Act. This amendment will further entrench casualisation of the workforce and seeks to further embolden employers to use a casualised workforce, as, opposed to a permanent workforce.

Loading offset

The newly inserted section 545A will apply to employees who are not casual employees, but, have been incorrectly described as casual employees and have been paid casual loading.

If such an employee commences an underpayment claim for entitlements owed to permanent employees, section 545A (2) requires that the amount of an underpayment claim must be set off against any casual leave loading paid.

Casual conversion

The newly inserted Division 4A provides a process for converting an employee’s employment from casual to permanent. Sections 66C and 66H set out a number of ‘reasonable business grounds’ that an employer can rely upon to not make an offer of conversion, or, to refuse a request for conversion to permanent employment made by the employee. Reasonable business grounds include that the employee’s position would cease to exist in 12 months, or, that their hours of work will be reduced within 12 months.

Our view is that ‘reasonable business grounds’ leave room for an employer to state that someone’s role isn’t required at the time of the request for conversation. They could then state in 12 months that the position or hours of that worker are still required due to a change in business circumstances, even though they denied an employee’s request at first instance and in reality they were likely eligible for conversion.

It also appears that an employer can continue to rely upon reasonable business grounds provided to an employee, after the first occasion they are considered for permanent employment, on later occasions that an employee requests permanent employment (see section 66F). We are concerned that an employer need only, in practice, consider an employee once for conversation to permanent employment if they have refused the employee’s request on reasonable business grounds.

Summary

In short, the Omnibus Bill does not include many of the contentious amendments that were the subject of the campaign against it, given that only Schedule 1 was passed. However, the introduction of the casual definition and the other amendments that flow from that definition will create significant issues for workers who have been treated differently from employees who are permanent, while in essence carrying out the same work.   

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