The Government on 9 December has moved to make significant and important changes to the Fair Work Act 2009. The aim of the proposed legislative changes is to resolve uncertainty as to casual employment by defining what is a casual employee, adding flexibility for part time employment, providing flexible work directions, introducing changes to enterprise bargaining rules and the approval process, and through new compliance and enforcement obligations.
These changes aim to help employers during the recovery process from the COVID-19 pandemic.
Here are the details regarding the proposed legislative changes:
Definition of casual employment
Recent decisions in Workpac v Skene and Workpac v Rossato determined that a particular ‘casual’ was in fact a permanent employee because the employee was on a long-term roster and had a “firm advance commitment” to the period of work. This meant that the ‘casual’ employee had an entitlement to paid leave entitlements, even though the employee had been paid the 25% casual loading.
1. A definition of casual employment at the time of engagement will mean that regardless of the regular nature of the work the employee will continue to be treated as a casual employee providing certainty for the employer.
2. Requiring courts to offset any casual loading already paid in “error” against any entitlements that may be applicable if the employee is determined to be a permanent employee.
3. Casual conversion when the employee has been employed for 12 months (already a feature of many awards and agreements) will be available, and employers will have to consider offering conversion unless the employer has reasonable grounds for not offering conversion.
Part time flexibility
Simplified additional hours agreements for part time employees will be available in relation to the following identified awards for a period of 2 years:
identified modern award means the following modern awards:
(a) the Business Equipment Award 2020 ;
(b) the Commercial Sales Award 2020 ;
(c) the Fast Food Industry Award 2010 ;
(d) the General Retail Industry Award 2020 ;
(e) the Hospitality Industry (General) Award 2020 ;
(f) the Meat Industry Award 2020 ;
(g) the Nursery Award 2020 ;
(h) the Pharmacy Industry Award 2020 ;
(i) the Restaurant Industry Award 2020 ;
(j) the Registered and Licensed Clubs Award 2010 ;
(k) the Seafood Processing Award 2020 ;
(l) the Vehicle Repair, Services and Retail Award 2020 ;
(m) a modern award prescribed by the regulations for the purposes of this paragraph.
Such agreements must allow for at least a minimum engagement of 3 continuous additional hours of work and the part time worker must work a minimum of 16 hours or an average of 16 hours a week. The agreement does not have to be in writing, but a record of the agreement must be maintained.
Flexible work directions
In a similar way to the current Jobkeeper flexibilities (and temporary flexibilities under some awards) there will be the right, for a period of 2 years, for employers covered by the identified awards to provide “flexible work duty directions” and “flexible work location directions”.
- Changes to approval process – the changes proposed here are to streamline the approval process by making it mandatory for the Commission to approve an agreement within 21 day, unless there are “exceptional circumstances”.
- There will be greater flexibility to approve agreements that do not meet the “better off overall test” depending on the views of the parties, the circumstances of the parties including the impact of COVID-19, the extent of the employee support for the agreement, and for these reasons is not to be contrary to the public interest to approve the agreement. There will also be limits on the rights of non-parties to intervene and delay the process.
- Zombie Agreements – these types of agreements are expired, ‘pre-reform’ collective agreements in place prior to 1 July 2009, which still apply. It is proposed to have such agreements automatically terminate on 1 July 2022. It is widely accepted that such agreements provide sub-standard terms and conditions. Employers affected will need to prepare to revert to the modern award system or commence bargaining for a new enterprise agreement.
Compliance and enforcement
Responding to the many recent examples of large-scale underpayment of wages a new “wage theft” offence has been proposed with fines of up to $5.5 million for companies and for individuals of up to $1.1 million and imprisonment of up to 4 years. The legislation is intended to override State and territory laws (Click here for our earlier article on wage theft as background).
Also, it is proposed to increase maximum civil penalties by 50% and the small claims cap from $20,000 to $50,000 to make it easier to recover underpayments by providing access to a cost-effective and quicker way to make a claim.
A process of conciliation and arbitration by agreement of small claims by the Fair Work Commission will be available where the court considers this is appropriate.
It may be a long process for the legislation to pass Parliament given that early media reports indicate there is significant opposition to the measures proposed and the potential of a hostile Senate.
ER Strategies will keep clients informed of developments and report and advise in relation to any legislative changes that are ultimately made.
Getting Our Help
If you have any questions in relation to the proposed changes or need assistance with any employee claims or complaints, we encourage you to call ER Strategies on 1300 55 66 37.