The most recent changes to the Fair Work Act 2009 (the Act) including the new Definition of Casual Employment and the Right to Disconnect commenced operation from Monday the 26th of August.
Although there have been a number of changes to the Fair Work Act this year, the majority don’t really impact on the baking industry insofar as they relate to subcontracting and regulating the “Gig” economy (Uber Eats for example). The changes which impact our industry directly are:
- The introduction of a new Definition of Casual Employment and methods for converting to weekly hire Full Time or Part Time employment; and
- The introduction of a new Right to Disconnect for employees.
The new Definition of Casual Employment in the Fair Work Act
Firstly, the changes to the Definition of Casual Employment only apply to casual employees engaged after Monday this week (26 August 2024). The changes mean that in order for an employee to be considered a “casual” there must be the following components:
- the employment relationship has no firm advance commitment to ongoing work, taking into account a number of factors, and
- they’re entitled to a casual loading or specific casual pay rate under an award, registered agreement, or employment contract.
This means that when a casual employee is offered a position, their contract must stipulate that they are not guaranteed any shifts or further engagements. It is also important to note that if they work regular hours after engagement, they could be found to be “full time” or “part time” by the Fair Work Commission despite what is written in the contract.
The Fair Work Ombudsman summarises the position as follows:
Whether there is a firm advance commitment needs to be assessed on:
- the real substance, practical reality and true nature of the employment relationship
- several other factors.
The other factors that must be considered include whether:
- the employer can offer or not offer work to the employee (and whether this is happening)
- the employee can accept or reject work (and whether this is happening)
- it’s reasonably likely there will be future work available of the kind the employee usually performs in the employer’s business, based on the nature of the business
- there are full-time or part-time employees performing the same kind of work in the employer’s business as the work the employee usually performs
- the employee has a regular pattern of work even if it changes over time due to, for example, reasonable absences because of illness, injury or other leave.
The above isn’t a full list and other factors may apply.
For this assessment, not all factors need to be satisfied and a single factor won’t determine whether a person can be considered a casual or not.
For example, a regular pattern of work on its own doesn’t indicate that an employee has a firm advance commitment to ongoing work. An employee who has a regular pattern of work may still be a casual employee if there is no firm advance commitment to ongoing work.
When assessing whether there is a firm advance commitment, you can look at:
- the contract of employment, or
- the contract as well as any mutual understanding or expectation between the employer and employee that isn’t part of the contract.
The mutual understanding or expectation can be worked out from how the contract is performed, or what the employer and employee do after entering into the contract.
So the question will come down to what actually happens on the floor of the bakery on a day to day basis and not just what is written in their contract (even though that is an important consideration).
As stated earlier, this change in definition in the Fair Work Act is for new casuals employed after Monday the 26 August 2024 and not employees engaged before that date. Please also remember that a new Casual Employee Information Statement has been released and must be provided to all new casual employees upon commencement. If you need assistance in finding this please call the Membership Hotline.
Right to Disconnect
There is also the new Right to Disconnect for employees in the fair work act which has created a new workplace right. This Right is the same legal effect as the right to Personal Leave and the right to raise a complaint about workplace conditions. This means that an employer is not permitted to take action against an employee who has exercised their Right to Disconnect from work.
What is this new Right? Firstly, it only applies to employers who engage 15 or more employees. Small employers (those who employ fewer than 15 employees) will not have to recognise this Right until August 2025.
Secondly, the Right is for an employee to reasonably refuse to respond to a workplace communication when they are not at work. They cannot, however, unreasonably refuse to respond to such a communication. The question then becomes “What is unreasonable refusal”?
The Fair Work Ombudsman states that:
When working out whether an employee’s refusal is unreasonable, the following factors must be considered:
- the reason for the contact
- how the contact is made and how disruptive it is to the employee
- how much the employee is compensated or paid extra for:
- being available to perform work during the period they’re contacted, or
- working additional hours outside their ordinary hours of work
- the employee’s role in the business and level of responsibility
- the employee’s personal circumstances, including family or caring responsibilities.
Other matters may also be considered.
It will be unreasonable for an employee to refuse to read, monitor or respond if the contact or attempted contact is required by law.
Unfortunately, this is going to have to be litigated before we will have a comprehensive answer to the question of “reasonable vs unreasonable refusal” but in the meantime we can make the following assumptions based on statements made by the relevant Ministers when this legislation was being debated:
- It would be most likely to be unreasonable for an employee to refuse to respond to a change of roster due to an emergency or unexpected absence (e.g. an offer of additional hours or a change of commencement/finish time);
- It would be most likely to be unreasonable for an employee to refuse to respond to a query relating to an emergency at the workplace;
- It would be most likely to be unreasonable for an employee to refuse to respond to a query outside of working hours if they are a senior manager who was paid a salary and their contract stipulated that they may be required to work additional hours and this is calculated in their salary.
As stated above, the Right to Disconnect is of the same legal effect as any other Workplace Right, and therefore it is vital that employers do not take negative (or “adverse”) action against any employee who seeks to exercise such a right without first seeking advice.
NBIA Members receive free unlimited phone and email IR & HR support as part of their membership. If you need assistance with the new definition of casual or the right to disconnect, please contact the NBIA head office on 1300 557 022 or via email.