In a significant win for employers, the High Court has handed down its decision overturning the Full Federal Court decision in WorkPac Pty Ltd v Rossato [2020] FCAFC 84 which permitted casual employees to receive the 25% casual loading and nonetheless claim paid service entitlements only applicable to permanent staff, where certain conditions applied.
The High Court decision now squarely aligns with the newly introduced casuals provisions in the Fair Work Act 2009 (Cth) which took effect on 27 March 2021. These legislative amendments affirmed that if agreed under terms of an employment contract, a casual employment relationship that mutually acknowledges no firm commitment to an ongoing working relationship or a regular pattern of work between employer and employee, will be sufficient to curtail any subsequent claims for service related entitlements enjoyed by permanent staff provided the parties observe the terms of the casual contract.
The beginning of the financial year marks a number of important changes to the employment law area. These changes, relate to minimum wages, the unfair dismissal threshold, the Fair Work Information Statement and changes to the Superannuation Guarantee rate. A summary of the changes to come and what this means for your business is covered in this alert.
On 23 March 2021, we published a client alert about a decision handed down by the UK Supreme Court in Uber BV and others (Appellants) v Aslam and others (Respondents) [2021] UKSC 5 (“Uber Decision”), whereby Uber drivers engaged as independent contractors were deemed to be “workers”.
Important amendments have been made to the Fair Work Act 2009 (Cth) which introduce new workplace rights and obligations with respect to casual employees. These changes came into effect on 27 March 2021.
The changes to casual employment are significant and will affect every national system employer in Australia which has a casual workforce.
Many labour hire and contract for service employers (such as commercial cleaning, security and maintenance companies) exist as a result of contracts they have with clients for their services, for which they engage staff. When these contracts come to an end, there is no need to retain the staff and as such their positions are redundant. It has been widely accepted that if this is the manner in which these businesses did business, and it was an ordinary and customary part of the business model, then the employer would not be liable to pay the employees redundancy pay as a result of the terminations due to loss of contracts. This idea has been enshrined in the Fair Work Act 2009 (Cth) which provides that redundancy pay is not required if the termination of employment is a result of the “ordinary and customary turnover of labour”. However, there has been much uncertainty as to when this actually applies and what these words mean. There has also been significant recent judicial scrutiny of the issue.
When the High Court decided in 2001 that an injured courier was, in fact, an employee rather than an independent contractor, the decision had a significant impact on the relationship between workers and business. This shift is occurring again in relation to the Gig Economy. In Hollis v Vabu Pty Ltd (2001) 207 CLR 21, the Court determined that what had once been assumed as an independent contractor, being a courier delivery rider, was determined to be an employee. The Court found that factors such as level of skill, control and work hours, presentation to the public, and tools of trade were all relevant to whether the legal relationship was one of contractor or employee. The Court in effect, developed the multi-factorial test to determine this issue, which has been applied consistently since to determine whether a worker is an employee or independent contractor. Later decisions have added other qualities, such as an ability to subcontract work, in determining the nature of an engagement.
Many employers engage casual employees who are often longstanding members of their workforce and/or work a regular pattern of hours. However, are these employees really engaged on a casual basis? This has been a vexed issue for some time and for legal questions such as access to the unfair dismissal jurisdiction and long service leave entitlements it has been recognised that casual employees who work regular and systematic hours, are to be treated in the same way as permanent employees. However, it has always been accepted that if casuals are paid a casual loading, they are not entitled to paid leave.
On 4 July 2019, the Fair Work Commission (“Commission”) finalised its decision in relation to the incorporation of new ‘annualised wage arrangement’ clauses, which will replace the existing annualised salary clauses in the modern awards already containing an annualised salary clause. The new terms will also be inserted into three modern awards (Pastoral Industry Award 2010, Horticulture Award 2010 and Health Professionals and Support Services Award 2010) which have not previously had an annualised salary clause.
It is often believed that “money talks” when it comes to hiring senior executives. But does a salary alone provide motivation to senior executives?
When it comes to senior executives, many businesses believe by paying a significant salary they will obtain the best out of the employee. However, this is not necessarily always correct. A number of other options should be considered by organisations to motivate their senior executives. It is a fact that the culture and success of any business starts with its people and most notably its senior people. If the senior managers are engaged, motivated and have the relevant leadership skills, the business is much more likely to succeed.
It is common knowledge that employers have a choice as to how they employ their employees. In circumstances where the employer does not need someone to work full-time hours, they can either employ the individual as a part-time permanent employee, or as a casual employee. However, many employers have abused the concept of casual employment by effectively retaining employees for long periods of continuous and predictable employment. We should also recognise that many employees prefer casual employment as they receive a greater rate of pay than they would otherwise as a permanent employee.
It is that time of year again. Employers are looking at the holiday period and how this is managed. Many employers will be closing down operations over the festive season and want employees to take this time as annual leave. However, employees are not always so willing to take annual leave at this time.
It is not uncommon that we receive queries as to whether employers can direct employees to take annual leave. This often arises when the business shuts down usually over the Christmas and New Year season. Conversely, it is not uncommon that we receive a query as to whether, and in what circumstances, employees are able to trade in a portion of their annual leave entitlement for cash.
For most employers, hiring casual employees has a number of advantages. Whether you are a small or large business, engaging casual employees can help increase flexibility in your workforce and afford you the ability to increase staffing levels during your busier months, whilst providing the ability to reduce headcount and/or wages during the quieter months.
However, in recent years there has been a significant focus on what casual employment actual means and it is now crucial that if businesses are engaging casual employees they are doing so on a genuine basis. To this end, employers that incorrectly classify an employee as a casual may leave themselves open to significant liability and potential risk.