Explainer: What is the definition of casual work and how will the IR reforms change it?

The federal government is today unveiling its industrial relations omnibus bill in parliament, which includes, for the first time, a statutory definition of casual employment in the Fair Work Act.

The definition is expected to draw on the controversial WorkPac v Rossato decision of the Federal Court to define a casual worker as one who is employed without any “firm advance commitment” to ongoing work.

Attorney General Christian Porter told Sky News today the reforms are designed to address known issues and remove barriers to job growth.

“What these reforms do are respond, not nearly to known problems in the system, but respond to the fact that we have gone through something extraordinary and there are a whole lot of businesses that need help to stay a afloat,” Porter said.

But how do courts currently define who is a casual worker and what effect will a new definition have?

To answer these questions, SmartCompany spoke to Jewell Hancock Employment Lawyers principal Trent Hancock.

Who is a casual employee?

A general definition of casual employment has developed in the courts for some time and was recently clarified by the full court of the Federal Court in the cases of WorkPac v Skene and WorkPac v Rossato.

In those cases, Hancock says, the courts confirmed that a casual employee is one that has no firm advance commitment to continuing and indefinite work, according to an agreed pattern of work.

The court said that if there was no commitment to ongoing work, an employee would then generally be in a situation with irregular work patterns, uncertainty, discontinuity, intermittency, and unpredictability of work.

“So essentially where an employee stands and waits for the opportunity to provide their services in response to demand, that would be someone who does not have that firm advance commitment to work,” Hancock explains.

A new definition

According to Hancock, the new definition of a casual employee, which is expected to be in the industrial reform package, will likely define a casual employee as someone offered work without a “firm advance commitment” of ongoing work.

The meaning of what a “firm advanced commitment” is will likely be guided by three factors:

• Whether the employee can elect to accept or reject work;
• Whether the employment is described by the employer as casual employment; and
• Whether the employee will be entitled to receive a 25% casual loading

What does this mean for businesses?

Hancock says a new definition would likely give more control to employers to make a work relationship casual by specifying it in the contract.

“Previously, the courts have focused on looking at the relationship in its entirety and all the surrounding circumstances,” he says.

“Here, it seems the intention is to focus on those three specific factors in determining if there is a firm, advanced commitment. Most of which is in control of the employer to define.”

According to Hancock, who is supportive of a new legal definition, an employer could specify in a contract whether an employee is casual, whether they can reject or accept hours and whether they are paid a 25% casual loading.

“I think it will bring more certainty… We don’t yet have a direct statutory definition of casual employment. So, at the very least, it looks like we’ll have that,” he says.