Australia Proposes Labor Bill with Major Changes to Casual Worker Rights

December 16, 2020

In a potentially significant change to Australian labor laws, the proposed “Fair Work Amendment Bill of 2020” creates a statutory new definition of “Casual Workers” and provide this class of worker with additional rights.  Separate from gig and platform workers, “casual workers” in Australia is a common, but legally undefined class of employees typically with irregular hours and undefined work pattern. They are usually paid up to 25% more but forgo regular schedules and additional benefits like sick and vacation leave.  
 
Fair Work Amendment Bill of 2020 Creates Statutory Definition of Casual Worker:  The “casual worker” class of employees in Australia has been subject to much uncertainty of late due to Australian Federal Court decisions which indicated that casual workers could receive the 25% boost in pay while also being entitled for paid leave if they perform sustained and regular work.  The ruling significantly impacted both the casual worker class – which has seen catastrophic job losses in the pandemic – as well as the companies which hire them.   
 
Under the proposed “Fair Work Amendment Bill of 2020”, “casual workers” would be defined by statute as someone who has accepted a job on an indefinite basis without predefined patterns of work.  Further, “casual work” will be restricted to employees who do not know when or how much work they will get.  Additional factors which are considered in defining the arrangement include whether the worker can accept or reject work assignments.   
 
Under the proposal, workers which fall under the definition of “casual worker” would be entitled to conversion to permanent employment if they have been employed for 12 months and worked a “regular pattern of hours” for at least six months.  Declining the initial offer to convert to full-time employment would still entitle the worker to be able to revisit the decision every six months.  
 
Companies can choose not to extend or accept an offer to convert upon reasonable grounds.  Further, employers can receive an exemption if making the role permanent would require a significant change to the worker’s hours or be unreasonable for the business.  Under the current draft, employees which have the offer to convert to full employment declined are left without much remedy.  
 
The rule also includes provisions to redress workers which have been wrongly classified as casual workers and were thus entitled to benefits such as annual and paid sick leave.  The Australian government estimated the total cost to employers resulting from claims by mischaracterized workers at $39 billion. The rule will be applied retrospectively to all current employees from the commencement of their employment, and there is a limitation period of six years on those types of claims.
 
Despite hope for a compromise, there are some issues.  For example, the unclear definition still leaves room for employer to erroneously deem a worker a casual employee even if they essentially work the same regular and systemic hours as their permanent peers.  Further, the introduction of the law has set off a blistering debate with both Unions and Business Groups launching major push back.   
 
Outlook:  The new bill will bring major changes to Australia’s labor practices. HR Policy Global will closely monitor the development and provide timely updates. Meanwhile, employers in Australia need to evaluate the workforce in their organizations and work on a contingency plan for if the bill is approved.