With April and Q2 at our doorstep, we thought we would highlight some key legislative changes that have recently taken place for you to reflect upon and consider any impacts for your business.
The first legislative change relates to the definition of a casual employee and what they are entitled to. These changes came into effect on 27 March 2021 under the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 (Amendment Act).
The key changes implemented under the Amendment Act in relation to casual employees include:
- The insertion of a legal definition of ‘casual employee’ into the Fair Work Act (FW Act) for the first time, which takes away from the previous notion of ‘regular and systematic’;
- The provision of a casual conversion entitlement after the employee has worked for 12 months and where other conditions are met, through the National Employment Standards (it now only provides for it under the Modern Award);
- Providing protection to business to prevent ‘double dipping’, so that where a casual has been misclassified a casual (as opposed to a permanent employee) the casual loading can be ‘offset’ against any claim for leave or other entitlements; and
- The requirement to provide every new casual employee a Casual Employment Information Statement (CEIS) before or as soon as possible after their commencement.
Under the new definition, a person is a casual employee is where the engaged individual accepts a job offer with the knowledge that there is no commitment of ongoing and indefinite work. Therefore, you as the employer have not provided the casual employee with a clear and firm advance that their work will be ongoing with a definitive work pattern.
If you have committed to work in advance, with a regular work pattern, the employee, will then not be considered a casual employee and could be entitled to the same entitlements as a permanent employee.
So does this affect me?
A couple of key considerations:
- Consider the casuals you employ in your business right now and reflect on whether their work arrangements are in line with the new definition of casual employees.
- It may be pertinent to review your template Casual Employment Contracts to ensure it includes a clearly drafted definition of the individual’s casual status, which is in alignment with the new legislation.
- Internal HR processes – will likely need updating with respect to the provision of the CEIS to new casuals, and the offering ‘casual conversion’ per the legislation.
One last update, comes from the Federal Budget in 2020-2021.
Although typically the responsibility of Finance, these changes can impact the company budget allocated for performance related remuneration increases and the type of communication to your employees at the time of any remuneration review.
It may be prudent to ensure you are proactive in coordinating your communications to your people regarding these changes.
The key superannuation changes are:
- The Super Guarantee (SG) is scheduled to increase from 9.5% to 10% on 1 July 2021;
- Effective 1 July, 2021, employees will automatically ‘keep’ their Super Fund when they change jobs. This is now referred to as ‘stapling’ the super account to the employee.
- New criteria that the budget unveiled, which may result in your Company’s “default fund” as being assessed as inadequate; and
- The employer must find out from the Australian Taxation Office (ATO) if a new employee has an existing Super Fund with which to pay the superannuation.
What are the potential impacts to my business?
Here’s what we recommend:
- Prepare your people communications relating to the scheduled SG increase;
- Determine where your default Super Fund performs under the new criteria set by the Federal Budget. Offering an inadequate fund has the potential to negatively impact your employer brand.
- Internal Processes – review your onboarding forms and process to incorporate the new requirement to determine if the new employee has an existing Super Fund.
For any change within a business, communication is key, and we can’t stress enough the importance of being on the front foot and engaging with your biggest asset, your people.
We’ll be back next month with further updates!
Disclaimer: The contents do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such.
Nick Hedges is the founder of Resolve HR, a Sydney-based HR consultancy specialising in providing workplace advice to managers and business owners. He recently published his first book, “Is Your Team Failing Or Kicking Goals – Take control of your people and their performance”. It is a practical response to the most pressing HR challenges, which can be found at https://resolvehr.com.au/.