Many businesses are hearing these terms thrown around and like many politically motivated catchphrases, it can seem to be going round in circles. The mainstream media picks up on the catchphrases and the circles keep going around.
In essence, the gig economy refers to the increase in regimes such as Uber, Menulog, Deliveroo and Airtasker. The people who provide the services (e.g., food delivery) are often not employees of the relevant company and are instead, so called, ‘independent contractors’.
Workforce casualisation refers to the increase in businesses engaging casual employees rather than full-time or part-time permanent employees. Recent Full Federal Court decisions involving Workpac1 have created further confusion about who fits into the ‘casual’ employee category and, how to deal with entitlements for long term casual employees.
Both the gig economy and a casualised workforce have there pros and cons such as greater flexibility for both the putative ’employer’ and ’employee’ in exchange for no annual leave or sick pay.
Who is a casual now?
The Fair Work Act 2009 (Cth) (FW Act) currently contains no definition of a casual employee. The Courts use a multifactorial test if asked to determine whether a particular employee is truly a casual. That test involves considering several different factors such as whether:
- the employer has provided a ‘firm advanced commitment’ for hours of work and the regularity of those hours;
- the employee can ‘truly’ accept or decline an offered shift;
- the employee gets paid sick or annual leave and whether payslips include a casual loading; and
- the employer has specified the employment as casual in a contract and included a clearly identifiable casual loading.
Currently, it is not a simple process and involves a deeper assessment than simply looking at the contract.
Who will be a casual in the future?
The ‘Omnibus’2 Bill is the Federal Government’s proposed solution to the casualisation problem, as well as the issues created for businesses and employees by the COVID-19 pandemic. The Bill will introduce a definition in the FW Act for a casual employee. That definition, critically, locks in a time period and provides key factors to look at, which allow an employer/employee to decide about whether the relevant employee is a casual.
If an offer is made by the employer that contains no firm advance commitment to continuing and indefinite work according to an agreed pattern of work and the employee accepts that offer and becomes employed, they are considered a casual employee. Critically this means the determination is made at the time of the offer of employment and acceptance by the employee and post-acceptance conduct cannot be considered.
The relevant factors for determining whether ‘no firm advance commitment’ exists are available here.3
These factors constitute an exhaustive list meaning nothing else can be considered. While there is a right to request conversion to permanent employment after 12 months’ which does involve looking at the regularity of shifts and re-assessing the relationship, the Bill does provide a greater degree of certainty for employers moving forward.
What are the odds we will get some certainty?
The Omnibus Bill has passed the House of Representatives, however, based on ongoing commentary from Labor MPs in the House of Representatives as well as Union parties, it will face an uphill battle in the Senate. The make-up of the current Senate means that several independent Senators will need to be convinced to vote for the Bill in order for it to be passed.
However, some certainty in the area of casual employment is long overdue.
What should businesses do now?
Your business should look at all casual arrangements that you have in place and assess them against the multifactorial test as set out in the Workpac case above. Until the Bill passes (or is rejected) there will be no certainty.
Several of the factors in the multifactorial test will remain relevant even if the Bill passes. Accordingly, businesses should act now to ensure that their casual employment arrangements are currently compliant and future proof, in the event the Bill does pass.
If you need any assistance in reviewing your casual employment arrangements, please reach out to our Team Leader of the Workplace and Employment Law team, Aaron Bradford on (07) 3648 9900.
- WorkPac Pty Ltd v Skene  FCAFC 131 and WorkPac Pty Ltd v Rossato  FCAFC 84 (though Workpac has received special leave from the High Court of Australia to appeal the Rossato decision).
- The Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020.
- See “First reading” under “Text of Bill” at Schedule 1, section 15A.