The Australian Labor Party has recently proposed a change to the definition of a casual employee that could have significant impacts for employers. The proposed change would provide casual employees with the right to convert to permanent employment after 12 months of regular work with the same employer. This change would have a number of impacts for employers, particularly those in industries that rely heavily on casual labour.
Under the current definition, a casual employee is someone who is engaged on an irregular or intermittent basis and is paid a higher rate of pay than permanent employees to compensate for the lack of entitlements such as sick leave and annual leave. Casual employees also have no expectation of ongoing work, and employers have the flexibility to vary their hours of work or terminate their employment without notice.
The proposed change to the definition of a casual employee would mean that after 12 months of regular work, a casual employee would have the right to request conversion to permanent employment. If the employer refuses, they would be required to provide written reasons for the refusal. The proposed changes would also require employers to provide casual employees with a copy of their employment agreement, including details of their rate of pay and hours of work.
While the proposed changes aim to provide greater job security for casual employees, they could have significant impacts for employers. Some of the potential impacts include:
Increased labour costs: If more casual employees are able to convert to permanent employment, this could lead to increased labour costs for employers, particularly in industries that rely heavily on casual labour.
Reduced flexibility: Employers may be less willing to engage casual employees if they know that they will have to convert them to permanent employment after 12 months. This could result in reduced flexibility for employers to vary hours of work or terminate employment without notice.
Administrative burden: Employers would need to keep detailed records of the hours worked by casual employees to determine when they become eligible for conversion to permanent employment. This could create an administrative burden for some employers.
Potential for disputes: The proposed changes could lead to disputes between employers and employees over the timing and reasons for refusing a request to convert to permanent employment.
Impact on small businesses: The proposed changes could have a greater impact on small businesses, which may struggle to absorb the increased labour costs associated with converting more casual employees to permanent employment.
The proposed changes to the definition of a casual employee have the potential to significantly impact employers, particularly those in industries that rely heavily on casual labour. While the changes aim to provide greater job security for casual employees, employers will need to carefully consider the impacts of the proposed changes and plan accordingly to manage any potential risks.