With the last round of wage increases rolling out on February 1st we have received a number of calls regarding the ability to pay flat or loaded rates to casual employees.  Given some of the decisions made by Fair Work in 2020 relating to casual employees it highlight the need to put casual rates in the forefront of everyone’s mind!  Whilst we usually try not to be so direct to clients, this is one of those topics that we can’t fluff around with!  

It is absolutely imperative that clients are clearly advised and aware of the concerns and risks now associated with applying flat rates to casual employees.  Dare we say, gone are the days.

In 2020, Fair Work heard the Rossato v Workpac case (as did every media channel and newspaper) which highlighted a number of concerns and considerations in the employment of casuals going forward.  By definition a casual employee is an employee who:

  • Works on an irregular and unsystematic basis
  • Has no expectation of ongoing employment 
  • Has no expectation or guarantee of regular hours
  • Is paid a clear 25% loading over full time and part employees

What this means is, if you are applying flat rates to casuals you potentially could be:

  • Providing an indication that a casual will work an expected number of hours, weekends or public holidays over a specified time (i.e. over a year a specified number of Saturdays or Sundays have been factored into a rate of pay) thereby providing an expectation that the casual will work those hours and have a reasonable expectation that their employment is expected to be ongoing
  • Under paying or overpaying a casual if they do more or less than the hours calculated in the loaded rate
  • Expose the organisation to having the casual employee determined to be part time or full time and therefore owed leave accruals

As a result of the changes to the interpretation of “casual”.  Human Resource Dynamics is advising clients that the application of flat rates to casuals is now risky and not recommended.  Further, we recommend that casual employees are paid for the hours they work at the appropriate penalty rate when the penalty rate applies.  If you choose to proceed with the application of flat rates for casuals there is a risk that the casual employee could challenge you on the nature of their casual employment resulting in payments or leave entitlements being owed.

OLD AND EXPIRED ENTERPRISE AGREEMENTS

2021 could also see some significant changes to old and expired enterprise agreements.  Whilst legislative changes have not been released …. YET! There is an expectation that old and expired enterprise agreements will be addressed in the 2021 reforms.   If you have an enterprise agreement that is old and expired, it is time to start planning, particularly if your agreement was approved prior to 2010.  We cannot emphasize enough how important it is to undertake annual and comprehensive reviews of all old and expired enterprise agreements to ensure you are meeting base rate assessments.  

If you would like to talk through what this all means, don’t hesitate to contact Deanne Baker – General Manager – Workplace Advice on 07 40517 307 or deanne@hrdynamics.com.au