Proposed changes to Casual Employment

Proposed changes to Casual Employment

What are the proposed changes to Casual Employment?

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The Federal Government has introduced an ‘omnibus’ Bill that will make significant changes to the Fair Work Act 2009 (Cth) (FW Act), with effect next year.

The changes include the introduction of:
·         a statutory definition of casual employment;
·         the ability to set-off casual loading against claims for leave entitlements; and
·         universal right for casual employees to convert to permanent employment.

We will keep all clients updated on any changes if/when they are passed into legislation.

The below may assist in some workforce planning for 2021.

Casual employment definition

The Bill will introduce a statutory definition of casual employment based on the tests enunciated by the Full Federal Court in the WorkPac decisions. The legislation will define a person as a casual employee if employment is offered and accepted without any firm advance commitment that the work will continue indefinitely and follow an agreed pattern of work.

The meaning of “firm advance commitment” will be guided by specific factors, including whether:

·         the employee can elect to accept or reject work;
·         the employment is described as casual employment; and
·         the employee will be entitled to a casual loading or a specific rate of casual pay.

The new definition will apply to casuals from the date they commence their casual employment

Set-off casual loading against leave entitlement claims

Employers will be able to offset amounts already paid through casual loading against any claims for the employee to be paid for leave entitlements. If an employer is sued for payment of these entitlements, the Court must allow the employer to deduct from the amount claimed any identifiable casual loading paid to compensate the employee for the absence of those entitlements. This will apply to past and future employees.

An attempt to give this protection to employers through a Fair Work Regulation was shown to be defective in the WorkPac v Rossato (2020) decision.

Casual conversion

The legislation would give a universal right for regular casuals to convert to full-time or part-time employment based on the nature of their regular hours. This right is currently provided in modern awards, as well as many enterprise agreements.

An employer must make an offer to a casual employee to convert if the employee has worked for the employer for a period of 12 months and has worked a regular pattern of hours on an on-going basis for the past 6 months (previously 12 months).

The employer must also weigh whether the employee could continue to work full-time or part-time without significant adjustment to hours of work.

An employer may decide not to make an offer or accept an employee request if they have reasonable grounds not to do so.

If an employee declines an initial offer to convert, a further right to request will be available every 6 months, as long as they remain eligible.

Federal Wage Theft Laws

A new criminal offence of wage theft will apply where an employer dishonestly engages in a deliberate and systematic pattern of underpaying one or more of their employees. It will carry a maximum penalty of $1.11 million and imprisonment for up to 4 years (or both) for individuals, and fines of up to $5.55 million for a body corporate. Individuals convicted of the criminal offence would also be automatically disqualified from managing corporations for a period of 5 years under the Corporations Act 2001.

The maximum penalty for ordinary contraventions by employers will increase to $19,980, or $99,900 for body corporate employers.

In the case of underpayments by bigger businesses, maximum penalties will be based on the higher of either “two times the benefit obtained”, or a $99,900 a fine. In case of serious underpayments by bigger businesses, penalties will be based on the higher of either “three times the benefit obtained”, or a $666,600 fine. This linking of the fine to the benefit obtained will not apply to individual employers or small businesses.

Infringement notice fines and maximum penalties for sham contracting and for failing to comply with a FWO compliance notice will all also increase by 50%.

For more information visit the FairWork Ombudsman website on Casual employees.

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Extension To The JobKeeper Program

Extension To The JobKeeper Program

Extension To The JobKeeper Program

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Under the new rules commencing on the 3rd of August 2020, the definition of eligible employees was expanded to include the following:

Eligible Employees

To meet the 1 July test you must satisfy all of the following on 1 July 2020:

You were employed by the eligible employer (or another entity in their wholly owned group), either as a;

  • Non-casual employee (whether full-time, part-time or fixed term)
  • Long-term casual employee (employed on a regular and systematic basis during the 12 month period that ended 1 July) and you were not a permanent employee of any other employer.

Therefore if the employer has employees who fit within this definition, they must offer the JobKeeper payment to these employees. It’s not an option to leave them out.

Nomination forms will need to be signed and returned by the employees and top-up payments, if applicable, need to be paid by the 31st August 2020.

For more information visit; https://www.ato.gov.au/general/JobKeeper-Payment/ 

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1.75% Increase to Minimum Wages

1.75% Increase to Minimum Wages

1.75% Increase to Minimum Wages

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The National Wage decision was announced on June 19th with a 1.75% increase awarded. This will be phased in over 3 dates.

Essential services awards such as Health, Electricity, Gas, Social & Community Services, Firefighters, Pharmacy will increase from July 1st, 2020.

The 2nd phase will increase from 1st November and includes the Clerical, Construction, Transport, Horticulture, Professional, Education, Veterinary and Waste management awards.

The final phase of increases will occur from 1st February 2021 and primarily cover the most affected COVID-19 industries such as Retail, Fitness, Hair & Beauty, Fast Food, Travel, Restaurant and Hospitality industries.

The absolute minimum wage applicable for an adult under any award will now increase to $19.84 per hour being $753.80 per standard 38 hour week.

Last week, the Victorian Government introduced a new bill to govern the issue of wages theft. The Wage Theft Bill 2020 will make underpayment of wages a criminal offence.

The bill will come into effect from 1st July 2021 and will place more stringent record keeping requirements on all employers.

For more information visit the Fairwork website

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Leave Entitlements For Casuals

Leave Entitlements For Casuals

Leave Entitlements For Casuals:
Further Landmark Decision

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The Full Federal Court of Australia (the “Court”) has determined a casual employee engaged over 3.5 years on six separate casual contracts was, on the facts, a permanent employee and therefore entitled to paid annual leave, paid personal leave, paid compassionate leave and to be paid for public holidays.

This case upholds an earlier decision, which confirmed a casual miner should receive the same leave entitlements and benefits as a permanent employee.

Facts of the Case

The employee commenced employment with the labour hire business (the “Business”) in July 2014 and signed six contracts over his tenure. Importantly, the contracts contained the following express terms:

  • The employee was a casual employee;
  • The casual loading paid to the employee was included in the flat rate of pay; and
  • One contract noted the casual loading was in lieu of leave entitlements including paid leave, notice and redundancy pay.

The Enterprise Bargaining Agreement covering the employee also clearly stated the casual loading paid to the employee was in lieu of leave entitlements.

During his six contracts, the employee worked under a roster arrangement. These rosters were often for a lengthy period of time. One roster, for example ran for the period 1 January 2015 to 31 January 2016.

Findings of the Court

The Court ultimately found the employee was a permanent employee even though his contract described him as casual.

In reaching this decision, the Court had regard to the true nature of the relationship and the work performed by the employee.

Integral to how the Court approached determining the true relationship was consideration of: how regularly the casual was engaged; any firm advance commitment to work between the employer and employee; and the predictability of the work.

The Court unanimously found the employee was entitled to back pay of leave entitlements and public holidays over the Christmas period. This case adds mounting case-law which address how Courts are assessing the relationship of casual employees. Casual employees who are deemed “regular and systematic” with a predicable work schedule are increasingly likely to be determined permanent employees with entitlements to paid leave.

Implications for the Future

This decision confirms businesses cannot rely on paying a casual loading to avoid or set off a liability to pay entitlements.

The Industrial Relations Minister, Christian Porter, did intervene in the proceedings and has stated “There is of course potential for an appeal….Given the potential for this decision to further weaken the economy at a time when so many Australians have lost their jobs, it may also be necessary to consider legislative options”

Whilst a decision is made as to whether to appeal, businesses should act with caution when engaging casual employees. In addition, businesses should review their current casual arrangements and ensure they are complying with all the relevant provision concerning casual employment in any applicable awards, or enterprise agreements.

If a business considers a casual employee is entitled to paid leave, we recommend advice be sought.

In the meantime, for those employers engaging casuals on a regular basis, the Victorian Chamber recommends the following practical considerations:

Casual Conversion

If an employee is covered by an award or enterprise agreement which contains a casual conversion clause, inform them of their right to seek casual conversion and remind them routinely. It may be prudent for employers to actively offer permanent opportunities to some casual employees, if the employer has capacity to do so and if the true nature of the employment could otherwise be ambiguous.

Declining the opportunity to convert to permanent full time or part time employment may serve as the employee’s reaffirmation of the casual arrangement and could provide a reference point for employers, should the employee attempt in future to be retrospectively categorised as a permanent employee. However, this step on its own is unlikely to satisfy the courts a casual employment relationship existed.

Any discussions or agreements must be recorded in writing and regard should be had to the requirements of any applicable award or enterprise agreement.

Rostering

For future rostered work include a statement to casual employees that all working hours and shifts are subject to change and may be declined by the employee.

Ensure a range of working hours and shifts are fairly distributed among employees. Employers can maintain a strong labour pool by ensuring an effective spread of existing skills and genuine opportunities for development among casual employees.

Rostering arrangements can be used to reinforce casual employment. This can be through a rostering system that allows staff to ‘bid’ for available rosters. Employers can confirm to the casual that each shift is accepted in isolation from the previous or next shift.

The above are suggestions that may assist going forward in the absence of immediate legislative reform. Equally, employers will need to be cautious with existing employees and that they are not exposing their business to a claim of adverse action.

Conclusion

Clear terms and conditions in employment contracts and other industrial instruments are always necessary, however what is now critical are the practices that are applied during the employment relationship including rostering patterns and managing the expectation of ongoing work. This decision as it stands also highlights that while employment relationships may start out as casual, or be agreed by all parties as being casual, it is the true nature of the relationship, which can change over time that is determinative.

Source: VECCI

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Coronavirus – Time For Panic Or Opportunity?

Coronavirus – Time For Panic Or Opportunity?

Coronavirus – Time For Panic Or Opportunity?

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The headlines over the last few weeks and in particular, over the last few days have looked something like the following:

  • Global Markets Fall for Fifth Consecutive Day
  • Stocks Fall Again as Coronavirus Spreads
  • Coronavirus has Major Impact on the Stock Market
  • Coronavirus Market Sell Off
  • Another Bad Day in the Markets as the Coronavirus Spreads

As you can imagine, this has had many investors selling their shares in a panic and running for the woods.

Never in human history has information been so freely available to us due to social media and the internet. For the most part, this is fantastic. However, with so many opinions and news headlines around, we can sometimes get caught up and begin to believe everything we read.

Now, I am not saying that the Coronavirus is not something we should be worried about at all. Many people have died from this illness and it has been a tragedy for those affected.

What I am saying is that this is not the first time (and likely not the last time) that we will see a major global epidemic impact investment markets.

The below table shows some past epidemics and the change in the US market following the outbreak.

Epidemic Epidemic End 6-Month % Change of S&P 12-Month % Change of S&P
SARS April 2003 14.59% 20.76%
Avian flu June 2006 11.66% 18.36%
Swine flu April 2009 18.72% 35.96%
Ebola March 2014 5.34% 10.44%
Measles/Rubeola June 2019 9.82% N/A
Source: Dow Jones Market Data

As can be seen from the above, following recent outbreaks, the US market has managed to rebound not only quickly, but also quite substantially.

Therefore, it is important not to forget some key fundamentals when it comes to investing.

Firstly remember, we invest for the long term and therefore short-term fluctuations and market events should not worry us.

Secondly, why did you start investing in the first place? Has the outbreak of Coronavirus changed your investment goals? If not, then why panic and sell because of a new media headline? If your investment goals remain the same, then so should your investment plan.

I am not saying to buy now because the market has dropped, the market may continue dropping over the next few days and weeks. We do not know where the bottom of the market is and neither does anyone else.

What I am saying is that it is important to stick to your plan and continue investing rather than selling in a panic because the markets have dropped and media headlines are in a frenzy. 

To summarise, ultimately the market’s reaction to the Coronavirus will come down to the severity of the virus and just because markets have managed to rebound following outbreaks in the past doesn’t mean that will be the case this time. It is however important to keep a clear head when it comes to selling your shares and to not let media headlines and social media panic cloud your judgement.

One final thought, remember what Warren Buffett, arguably the greatest investor of all time, once said:

“Be greedy when others are fearful, and fearful when others are greedy”

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Award Changes – Annualised Wage Agreements

Award Changes – Annualised Wage Agreements

Award Changes – Annualised Wage Agreements

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Modern Awards have now been updated to include the below changes around Annualised Salaries/Wage Agreements. These changes are effective from 1st March, 2020.

An annualised wage agreement may also be defined as where a flat fixed pay rate is applied for all time worked.

There are some critical thought changes here, reflecting the volume of common law cases and the impacts of those decisions on award interpretation.

What is included in the changes?

  • The employer must advise the employee in writing of the salary and keep a record:
    1. Of the salary payable
    2. The award provisions satisfied by the salary (what is actually included for example specific allowances or loadings, by default anything not listed would be an additional payment)
    3. The method of calculation and
    4. The maximum number of overtime hours it is in satisfaction for (the outer limit).
  • If the employee works in excess of the maximum number of overtime hours, the employer is obligated to make a separate make-up payment.
  • Review the salary arrangement every 12 months and amend any shortfalls in 14 days.
  • Keep appropriate records of employee working times including unpaid meal breaks. Such a record should be acknowledged by the employee, either physically or electronically.

What do I need to do now?

  • Make sure you & your employee keep a record of all time worked and that this record is acknowledged by the employee. This could be as simple as a book showing start & finish times then signed by an employee.
  • Review any existing contracts and make appropriate adjustments as soon as practical.

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