Legislative Update: Changes to Fair Work Act 2009 (Cth)

On 16 December 2020, we provided an update on the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 (the Bill) which sought to make amendments to the Fair Work Act 2009 (Cth) (the FW Act). Our update can be accessed here.

There were five key areas of proposed reform and an additional schedule outlining new measures designed to enhance the powers of the Fair Work Commission (the Commission). The key areas were:

• Award simplification
• Greenfields agreements
• Casual employment
• Enterprise bargaining
• Compliance and enforcement

The Bill has since been amended by the Senate. The amendments to the Bill made by the Senate have passed the House of Representatives and the Bill received Royal Assent on 26 March 2021. The changes to the FW Act as set out in the Bill are now in operation.

Casual Employees

The focus of the Bill was largely on casual employees following recent Federal Court decisions.

In addition to including a definition of a ‘casual employee’, the FW Act now has specific provisions pertaining to offers and requests for casual conversion, from both the employer and employee. These provisions are similar to ‘casual conversion’ clauses which feature in many modern awards.

As is the case with current casual conversion clauses, an employer is not required to offer a casual employee conversion to part-time or full-time employment, or alternatively an employer is not required to accept an offer by a casual employee for conversation to part-time or full-time employment, if there are reasonable grounds not to make the offer or refuse the request which are based on facts that are known, or reasonably foreseeable, at the time. Consultation with the employee is also required in certain circumstances.

The Bill does include a non-exhaustive list of what constitutes ‘reasonable grounds’, including that the casual employee’s position will cease to exist in the period of 12 months after the time of deciding not to make the offer or their hours of work will be significantly reduced in that period.

The Bill also clarifies the issue of casual loadings and when casual loadings can be used by employers to set off against a claim for part-time or full-time like employee entitlements. A court will be compelled to reduce an amount payable by an employer to an employee for relevant entitlements by an amount equal to the loading amount, subject to certain criteria.

Importantly, under the new FW Act, the Fair Work Ombudsman will be required to prepare and publish a Casual Employment Information Statement. It will be a requirement for employers to give each casual employee a copy of that Casual Employment Information Statement before, or as soon as practicable after, the employee starts casual employment.

BOOT

The key change that was proposed in the Bill by the Senate was the removal of some of the provisions that sought to revamp the ‘better off overall test’ (BOOT) in enterprise bargaining. Specifically, the Senate removed from the Bill the option for the Commission to approve an enterprise agreement that leaves some workers worse off if the business has been affected by COVID-19.

However, all proposed changes regarding the BOOT were ultimately rejected and did not form part of the Bill as passed. As such, the BOOT remains unchanged.

Part-time Employees

The Bill also proposed to introduce in the FW Act the concept of a ‘simplified additional hours agreement’ which could be entered into by an employer and a part-time employee who is covered by a ‘relevant identified modern award’ (an exclusive defined list which largely relates to the retail and hospitality sectors), whose ordinary hours of work are at least 16 hours per week.

The effect of a ‘simplified additional hours agreement’ was to allow eligible part-time employees to work additional hours at ordinary rates of pay. There were certain circumstances under a ‘simplified additional hours agreement’ where overtime would be payable.

However, all proposed changes to the FW Act in relation to agreements for part-time employees to work additional agreed hours were rejected as the Bill progressed through the Houses. Therefore, the introduction of ‘simplified additional hours agreements’ do not form part of the FW Act currently in force.

It is now timely for employers to review their casual contracts in place to ensure that the provisions are compliant with the new FW Act requirements.

For more information please contact Sathish Dasan on +61 8 8210 1253 or sdasan@normans.com.au, Ganesh Krishnan on +61 8 8217 1395 or gkrishnan@normans.com.au or Anastasia Gravas on +61 8 8217 1331 or agravas@normans.com.au.