Two changes to the casual workforce laws that impact SMEs

As of July 1st 2018, employers were required to make several substantial changes in their employment frameworks to reflect updates in employment law legislation.

While these updates look at a number of areas, the two biggest changes focus on increasing the minimum wage and the ability for casual workers to request full-time employee status, after they satisfy certain employment conditions. For employees, this is known as their Casual Conversion Right.

Minimum wage and its effect on unfair dismissal protections

As of July 1st, the minimum wage in all modern awards increased by 3.5 per cent. Employees who are not covered by a modern award or enterprise agreement must be paid at least the national minimum wage, which increased to $719.20 per week based on 38 hours, or $18.93 per hour.

A similar increase now applies to casual retail workers employed on Saturdays. From November 2018, casual workers must receive an extra 15 per cent pay for all work and an additional five per cent will be added to all casual hours worked after six pm.

About 350,000 casual workers are covered by these new provisions, and critics believe this may impact seasonal hiring as it will cost employers more to hire the same number of staff. This means there may be a drop in seasonal employment numbers as employers attempt to maintain profit margins.

However, the increase in the minimum wage may affect some workers’ right to make unfair dismissal claims as the high-income threshold will also increase.

The high-income threshold refers to the highest salary an employee can earn and still claim protection from unfair dismissal. Anyone who earns more than the high-income threshold cannot claim unfair dismissal, although they will still be protected from other actions relating to unlawful termination.

Casual conversion rights

The Fair Work Commission has developed a draft clause which will allow casual employees to request full or part-time employment status, once they are employed on a regular basis for 12 months.

However, an employer may refuse to convert a worker’s employment, for a range of reasons for example, if the employer has substantial reason to believe the hours of work may decrease. This refusal must be on reasonable grounds, in writing and after a discussion with the employee. This has taken effect as of 1 October.

Employers must be aware these changes are now in force. They are encouraged to review any relevant pay guides to ensure they are complying with new rates and remember to update any necessary accounting procedures.

Rolf Howard, Managing Partner, Owen Hodge Lawyers

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