Casual chaos

Caused by changes to the Fair Work Act

The Federal Government recently changed the Fair Work Act to undo the positive outcomes won by unions for workers who were wrongly classified as casual employees. The full impact of these changes is unlikely to be clear for some time.

The regulatory impact statement to the Bill that gave effect to these changes identified ‘the problem’ in this way:

“Despite having a long industrial history in Australia, the current legal framework around casual employment, covering over 2 million employees, does not provide certainty or confidence for employers or employees to use casuals as a genuine employment option.”

This reference to using casuals as a ‘genuine employment option’ is important to note. Especially when you consider the unsupported assertion by Queensland LNP Senator Amanda Stoker in her maiden speech that “The unions rail against casualisation… but it is the direct product of the policies for which they advocate”.

One assumes Stoker is suggesting that the conditions won for employees after years of struggle have ‘forced’ employers to adopt a practice of avoidance – in the same way it could be said that tax evasion is the direct product of taxation.

Despite the window dressing of casual conversion arrangements, these legislative changes have been enacted to entrench casual work and enable the continuation and proliferation of poor employment practices.

Recent decisions of the Federal Court of Australia affirmed that an employee is not to be regarded as a casual simply because that’s the designation given by the employer. The Court identified that the question of whether an employee was a casual required an assessment of the conduct of the parties, and the ‘real substance, practical reality and true nature’ of the employment relationship ‘by reference to the actual way in which work was carried out’.

Definition of casual

The new definition of a casual employee is contained in s15A of the Fair Work Act and primarily focuses upon what is offered by an employer at the time of engagement. Subsection 15A(4) is where the agenda of the government becomes wholly transparent:

“To avoid doubt, the question of whether a person is a casual employee of an employer is to be assessed on the basis of the offer of employment and the acceptance of that offer, not on the basis of any subsequent conduct of either party.”

One thing casual members can be sure of is that there will be a period of significant uncertainty ahead.

So, the sham arrangements are now endorsed and protected by the legislative amendment – never mind the “real substance, practical reality and true nature” of all that follows, it’s solely determined by what the employer said on day one.

There are myriad problems with the new definition; some labour law academics identified that it also inadvertently covers employees engaged on fixed term contracts.

Disturbing aspect

Perhaps the most disturbing aspect of the changes is that they apply to past periods of employment. Law students are taught that retroactive/retrospective legislation is generally undesirable for a range of reasons, not the least of which being that citizens are unable to comply with laws they don’t know about, and that there is a greater likelihood of unintended detrimental consequences. It’s also possible that adverse side effects may emerge to haunt employers as much as employees.

It’s for these reasons that there are likely to be a range of unexpected consequences emerging over an extended period.

By way of example, the IEU was assisting a member in a dispute about whether her prior service as a casual employee was to be counted for the purposes of calculating redundancy pay. The recent legislative amendments inserted a new provision into the Act which read:

“A reference in this section to continuous service with the employer does not include periods of employment as a casual employee of the employer.”

The inclusion of this provision not only pulled the rug out from under the member, but arguably proved that the union’s view initial had been correct.

The haste with which these legislative amendments were done is also proving to be a further challenge for the Fair Work Commission which has been directed to review and vary all modern awards by 27 September 2021 to ensure consistency with the new definition.

The Educational Services (Teachers) Award 2020 has been identified as one of the six awards to be reviewed in the first stage of that process, and this review will undoubtedly highlight a range of further problems and unintended consequences.

One thing casual members can be sure of is that there will be a period of significant uncertainty ahead. The other certainty is that (despite claims that casual conversion provisions are there to assist employees) these changes will be seen by many employers as legitimising the use of precarious employment practices to avoid moral and legal obligations to workers.

Iain Bailey
Industrial Officer