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New review of modern award regulation of casuals

Following the commencement on 27 March 2021 of new legislation inserting provisions about casual employment in the Fair Work Act 2009 (Cth) (the FW Act), the Fair Work Commission (FWC) will review modern awards to assess how they will interact with the amendments.

The amendments to the FW Act require the review to determine what modern award variations are required to make the awards consistent to operate effectively with the FW Act.

The review will consider the terms that deal with casual employment and make relevant variations to modern awards to reflect the legislative changes made by the casual employment amendments. The review is required to be completed by 27 September 2021.

The first stage of the review

The first stage of the review will look at what needs to change in six awards:

  • General Retail Industry Award 2020;
  • Hospitality Industry (General) Award 2020;
  • Manufacturing and Associated Industries and Occupations Award 2020;
  • Educational Services (Teachers) Award 2020;
  • Pastoral Award 2020; and
  • Fire Fighting Industry Award 2020.

The things that will be considered in the first stage are:

  • what needs to change in the way the awards define casuals (presumably to align it with the new statutory definitions in the FW Act);
  • what needs to change to award model casual conversion clauses (again, to align them with the new casual conversion National Employment Standard [NES]); and
  • the implications of any award variations for existing employment arrangements, and what transitional arrangements may be needed.

This will not be straightforward. For example, the definition of a casual in clause 11.1 of the General Retail Industry Award is “a casual employee is an employee engaged as such”. The new FW Act uses a much narrower definition of casuals (i.e. there must not be a firm advance commitment to continuing and indefinite work according to an agreed pattern of work). If the FWC decides to adopt this narrower definition of casual, what happens to those employees previously engaged and paid as a casual who will fall outside this definition because there is a firm, advance commitment?

The FWC has issued directions for lodging submissions for the stage one review along with a discussion paper. The FWC is encouraging employer groups and unions to have discussions together on the review.

The second stage of the review will look at the remaining modern awards.

How to prepare for award changes

You should be reviewing your template documents used to engage casuals to ensure that, by the end of the transitional period in the new amendments to the FW Act (27 September 2021):

  • the contract identifies the Casual Employment Information Statement as being enclosed (this must be issued to existing casuals and new starters after 27 September 2021);
  • references to a casual conversion clause in the contract align with the terms of either the new casual conversion NES in the FW Act or any applicable modern award clause (post-variation by the FWC) (If an applicable enterprise agreement casual conversion clause makes provision in terms that are less beneficial than the new NES, the references in the contract to agreement provision should be expressed to be subject to the NES. Employers should also consider accessing the new powers given to the FWC to vary enterprise agreements to resolve these issues.);
  • references to payment of a casual loading make it clear the loading is paid in compensation for the fact the casual will not receive entitlements to paid leave, and notice and redundancy pay; and
  • the terms of the casual contract are consistent with the FW Act definition, i.e. the employer makes no firm advance commitment to the employee to offer continuing and indefinite work according to an agreed pattern of work, and if the employee accepts the contract, they do so on the basis that there is no such firm advance commitment given.
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