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Casual employment clarified by the Fair Work Commission

Shawn Skyring ||

On 19 July 2021, the full bench of the Fair Work Commission (the Commission) led by President Iain Ross confirmed the changes that will be necessary to modern awards according to the new Omnibus Bill and its changes to the Fair Work Act 2009 (Cth) (the Act).

Key principles confirmed

The full bench confirmed the following key matters in relation to casual employment:

  1. A ‘casual employee’ is one who accepts a job offer from an employer knowing there is no firm advance commitment to continuing work with an agreed pattern.
  2. The casual status of an employee must 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.

The full bench also affirmed the following inconsistencies:

  1. The definition of “engaged as a casual” with the new definition of a casual employee under the Act; and
  2. The notion of being ‘paid by the hour’ with section 15A of the Act.

The bench indicated support for the view that there may be definitions of casual employment contained in the awards of ‘residual categories’, such as in retail and pastoral work, which may create uncertainty against the expression of casual employment now under the Act.

However, it accepted the view of the Australian Council of Trade Unions (ACTU) that the abovementioned casual terms are not inconsistent with the revised Act for simply differing with the new provisions.

Although a simple fix might have involved replacing the definitions in awards with that in section 15A of the Act, or referring to section 15A in awards, the bench considered that this would make an award inconsistent with the amended legislation and have “little utility”. Therefore, it determined that award terms that require employers to tell employees on engagement the basis on which they are employed should still be varied (rather than removed) to resolve potential inconsistency.

On this basis, the bench confirmed that the planned variations to the six test cases, including the retail, hospitality, manufacturing, teachers and pastoral awards would still take effect from 27 September 2021.

In addition, the Commission clarified that the firefighters award did not fall within the scope of the casual terms review. This was because the award provides for “indefinite work according to an agreed pattern of work”, being “distinct from casual employment as defined in s15A of the Act”. Therefore, the award did not itself provide for casual employment for the purposes of a casual terms review.

Casual Conversion

Despite the Commission’s confirmation that casual employment involves no firm advance commitment to continuing work with an agreed pattern, an employer will continue to hold an obligation in relation to casual conversion. That is, in accordance with Part 2-2 Division 4A of the Act (and the National Employment Standards), an employer must offer a casual employee the chance to request casual conversion to permanent (full or part-time) employment after 12 months of regular and systematic casual employment unless a lesser period (6 months) is provided for by an applicable modern award. The offer must be made in writing.

The bench additionally clarified that it did not think awards should be varied to specify the entitlements for which casual loading compensates – perhaps because this might open some floodgates? Accordingly, the bench asserted that the NES casual conversion entitlements were more favourable than the model casual conversion clause contained in awards, which should therefore be removed and replaced with a reference to the NES provisions. It was confirmed that this would be the approach at least for the manufacturing and hospitality awards.

Additional Considerations

The bench will now issue draft determinations to vary the six test case awards in accordance with the above findings. These will provide a basis for further changes to the remaining 150 modern awards captured in ‘Stage Two’, all to take effect from 27 September 2021.

With this in mind, there appears to remain some scope for further test cases to appear before the Commission, involving disputes related to casual employment within those ‘residual categories’ of award contemplated by the bench. This risk may even extend naturally beyond the deadline of 27 September 2021 as the Australian workforce adapts to these new casual employment structures.

If you have any questions relating to any of the above, please don’t hesitate to contact a member of Coleman Greig’s Employment Law team, who would be more than happy to assist you today.


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