Important New Employment Laws

Posted by Andrew Schoenfeld on

Good Morning all,

As we are receiving numerous requests from our clients of the new employment laws relating to:

  • Casual employees right to convert to permanent
  • Casuals deemed worker through continuous service
  • Long service leave changes in Victoria
  • Long Service Leave for casual and seasonal employees
  • What information has to be on a pay slip

We have sought clear advice from a leading Barrister to inform and educate our clients on what the law says about statutory entitlements. This is a lengthy email, yes, “War and Peace”, but if you want to ensure your are applying the legal requirements when determining an employee/s or casual rights, then it is a must read.

Employing staff can be a mine field even for the best of us! One of the confusing aspects can be understanding the difference between employment statuses and what each one can mean for your employees. This email will hopefully shine some light of the topic.

EMPLOYMENT STATUSES

There are four employment statuses to choose from:

  1. Permanent Full Time
  2. Permanent Part Time
  3. Casual
  4. Temporary

Here is an explanation of each employment status:

Permanent Full Time Employee

Full time employees have been employed on an ongoing basis for an average maximum of 38 ordinary hours per week. They are entitled to:

  • Annual leave
  • Personal leave
  • Public holidays
  • Parental leave
  • Long service leave
  • Superannuation guarantee
  • Period of notice if job is terminated

Permanent Part Time Employee

Part time employees work less than 38 hours per week but these are usually set hours and/or days. They are entitled to:

  • Annual leave
  • Personal leave
  • Public holidays
  • Parental leave
  • Long service leave
  • Superannuation guarantee
  • Period of notice if job is terminated

Casual Employee

Casual employees do not have regular work hours and are not guaranteed to get regular work. They are paid for the hours worked and receive a loading (usually 25% but you must check the relevant award as this can vary) to compensate them for not receiving the same benefits as full or part time workers. Casuals are entitled to:

  • 2 days unpaid carers leave per occasion
  • 2 days compassionate leave per occasion
  • Community service leave (except paid jury service)
  • Unpaid parental leave
  • 2 days unpaid adoption leave
  • Superannuation guarantee, if they earn more than $450 before tax in a calendar month.
  • A day off on public holidays unless a work day has been arranged between the worker and the employer
  • A maximum of 38 hours per week, plus reasonable additional hours
  • After a period of regular employment across 12 months (and if the position is to continue), casuals are entitled to flexible working hours and parental leave (
  • Casuals may also be entitled to long service leave and paid parental leave. (For casual employees to be eligible for unpaid parental leave they need to have: been working for their employer on a regular and systematic basis for at least 12 months. a reasonable expectation of continuing work with the employer on a regular and systematic basis, had it not been for the birth or adoption of a child) 

Casual employees right to convert to permanent

Summary of the position from 1 October 2018

While the term “Right to request casual conversion” provides the full context of the obligations, here is a summary of the leading points:

The term does not have the result of obliging employers to offer permanent employment to eligible casual employees; rather it has the result of entitling eligible employees to request conversion to permanent employment.

  • To request casual conversion:
  • the employee must have worked for the employer for a period of 12 months or more; and
  • the employee must, over the preceding 12 month period, have worked a pattern of hours on an ongoing basis, which they could continue to perform as a full time or part time employee, without significant adjustment.
  • Employees engaged for short periods and/or who work irregular shifts or hours will not meet the criteria to convert.
  • Due to the wording of the model term which includes the words “in the preceding period of 12 months worked…”, the right to request conversion does not arise as a “one off” event, but is a continually exercisable right while an employee has worked the relevant pattern of hours.
  • Eligible employees seeking to convert are required to make a request to the employer in writing.
  • Employers can reject a request, provided that there has been consultation with the employee and there are reasonable grounds based on facts which are known or reasonably foreseeable (for instance, where the casual employee’s position could cease or the hours could significantly change).
  • A refusal must be put in writing with the reasons set out clearly.
  • If the employee seeks to challenge the employer’s refusal, then this will be resolved through the dispute resolution provision of the Award.

If a request is granted, it:

  • must be discussed and recorded in writing; and
  • will begin at the commencement of the next pay cycle.

LONG SERVICE LEAVE CHANGES IN VICTORIA

The New Act came into effect by 1 November 2018

PERIODS OF SERVICE AS A CASUAL EMPLOYEE

Periods of service as a casual employee do not count towards the minimum employment period unless both of the following conditions are satisfied:

  • the casual employee was employed on a regular and systematic basis, and
  • the casual employee had a reasonable expectation of ongoing employment on a regular and systematic basis.

What is a 'period of service' for a casual employee?

Shortland v Smiths Snackfood Co Ltd[ explained the following principles:

  • Each occasion a casual employee is engaged is a separate contract of employment.
  • These contracts may be week to week, shift to shift, hour to hour or for any other agreed short period.
  • In this sense no casual employee has a continuous period of employment beyond any single engagement.
  • For the purpose of unfair dismissal it is the period of service rather than the period of employment that is relevant.
  • If the conditions of s.384(2)(a) are satisfied, then a period of service by a casual employee will count towards the period of continuous service.
  • Once continuous service is established, the employer or employee may only break continuous service by making it clear to the other party that there will be no further engagements.
  • For casual employees it is possible that some periods of service will meet the conditions of s.384(2)(a) and others will not.
  • Absence for illness or injury does not break a period of continuous service.

What is employment on a regular and systematic basis?

It is the employment that must be on a regular and systematic basis, not the hours worked.

However, a clear pattern or roster of hours is strong evidence of regular and systematic employment.

The term 'regular' implies a repetitive pattern and does not mean frequent, often, uniform or constant.

The term 'systematic' requires that the engagement be 'something that could fairly be called a system, method or plan'.

Where there is no clear pattern or roster, evidence of regular and systematic employment can be established where:

  • the employer offered suitable work when it was available at times that the employee had generally made themselves available, and
  • work was offered and accepted regularly enough that it could no longer be regarded as occasional or irregular.

What is a reasonable expectation of continuing employment?

The Fair Work Act does not define the term 'reasonable expectation of continuing employment', this will depend on the particular circumstances.

One test that has been applied is 'whether or not during a period of at least six months prior to the dismissal ... the employee had ... a reasonable expectation of continuing employment on a regular and systematic basis'.

Case examples

Prior resignation strong indicator of a reasonable expectation

Tilbrook v Willall Industries Pty Ltd [2011] FWA 6300 (Hampton C, 5 October 2011).

A casual was employed over a total period of 32 months, which included an 11 week period in which the casual did not make himself available for work. It was held that the 11 week period interrupted or concluded continuous service. However, the casual employment since that period, although there were some weeks in which no work was performed, was held to be regular and systematic and gave rise to a reasonable expectation of continuing employment. This was sufficient to meet the statutory requirement for continuous service.

NO reasonable expectation of continuing employment - Infrequent engagements

Harrison v Imperial Management Queensland Pty Ltd T/A Pacific Red Produce [2011] FWA 8099 (Richards SDP, 30 November 2011).

Because the frequency of engagement of the applicant employee was erratic, with the ultimate engagement being 7 months after the penultimate engagement, the applicant could not have had a reasonable expectation of continuing employment.

Employer made casual arrangement clear

Leslie Holland v UGL Resources Pty Ltd T.A UGL Resources [2012] FWA 3453 (McCarthy SDP, 23 April 2012).

The applicant employee was engaged for discrete periods of differing duration not forming any pattern, and there were extensive absences between each period of employment. The employer made it clear on each engagement that there should be no expectation of continuing employment. It was held that applicant should not have had a reasonable expectation of continuing employment.

LONG SERVICE LEAVE FOR CASUAL AND SEASONAL EMPLOYEES

The LSL Act 2018 entitles full time, part time, casual, seasonal and fixed term employees to LSL where their employment has been 'continuous'. Under the LSL Act 2018, this means that there must not be an absence of more than 12 weeks between any two instances of employment, unless:

  • the employee and the employer so agree before the start of the absence
  • the absence is in accordance with the terms of the engagement
  • the absence is caused by seasonal factors
  • the employee has been employed on a regular and systematic basis and has a reasonable expectation of being re-engaged.

WHAT INFORMATION HAS TO BE ON A PAY SLIP

Pay slips have to cover details of an employee’s pay for each pay period. Below is a list of what to include:

  • employer’s and employee’s name
  • employer’s Australian Business Number (if applicable)
  • pay period
  • date of payment
  • gross and net pay
  • if the employee is paid an hourly rate:
    • the ordinary hourly rate
    • the number of hours worked at that rate
    • the total dollar amount of pay at that rate
  • any loadings (including casual loading), allowances, bonuses, incentive-based payments, penalty rates or other paid entitlements that can be separated out from an employee’s ordinary hourly rate. For example, a note could be included on a pay slip that the hourly rate incorporates the relevant casual loading.
  • the pay rate that applied on the last day of employment
  • any deductions from the employee's pay, including:
    • the amount and details of each deduction
    • the name, or name and number of the fund / account the deduction was paid into
  • any superannuation contributions paid for the employee’s benefit, including:
    • the amount of contributions made during the pay period (or the amount of contributions that need to be made)
    • the name and / or number of the superannuation fund the contributions were made to.

Should leave balances be on a pay slip?

While it's best practice to show an employee's leave balances on their pay slip, it’s not a requirement. Employers do need to tell employees their leave balances if they ask for it.

 

Regards

Andrew Schoenfeld
CEO

Level 8, Tower 1, 1341 Dandenong Road, Chadstone Victoria 3148 Australia