Be IR Fit For 2021: Make sure your sport and fitness business doesn’t underperform this yearJuly 12, 2021
There probably wasn’t a soul alive who saw a pandemic coming that would wreak havoc on the sports and fitness industry, with public health orders suspending most sporting activities and competitions and slamming shut the doors of gyms and leisure centres.
Then came the same questions for almost everyone in the industry:
- How do we stand down?
- Do we qualify for JobKeeper?
- What is a JobKeeper enabling down direction?
- Can my people work from home?
- How do I get them back into the workplace when restrictions ease?
And, as if that wasn’t enough, there were changes to the Fitness Industry Award during 2020:
- 20 November 2020: clarification that casual loading is not payable on overtime hours; and
- 20 November 2020: clarification that the maximum number of ordinary hours for casual employees in a day is 10 hours;
- 8 April 2020 until 29 March 2021: 2 weeks unpaid pandemic leave and annual leave at half pay subject to agreement with the employer;
- an annual wage review of 1.75% that took effect from 1 February 2021.
Well, if you thought 2020 was a hard slog, limber up for the amendments to the Fair Work Act 2009 regarding casual employees.
Existing definition of a casual employee
As a result of some recent decisions (Workpac v Skene and Workpac v Rossato), the criteria for determining whether an employee is a casual has been somewhat up in the air.
There’s been a difference between the definition of a casual employee in Awards (a casual is “engaged and paid as such”) and the common law (a casual employee is not engaged on a regular and systematic basis). As you can see this is about as helpful as performing a deadlift with a bent back.
In both Skene and Rossato, the employer was required to back pay annual leave, sick leave and entitlements to a casual employee who was engaged on a regular and systematic basis according to the common law definition of a casual employee.
New definition of a casual
Being permanently confused about casuals has led the federal government to change the law with amendment to the Fair Work Act 2009 and the National Employment Standards.
The Fair Work Act now contains a statutory definition of a casual employee as being an employee that accepts an offer of employment that does not have a “firm advance commitment” of ongoing work.
The Act contains a list of matters that must be taken into account to determine whether the offer is one that doesn’t have a “firm advance commitment”.
I know you’re probably not interested in what the Fair Work Act says, you just want to know what it does – what it means for your business. Well, here’s an hypothetical example which deals with the breadth of the changes, especially those relating to the conversion of casual employees to permanent employment:
Example – Karen and Miranda at 7 Day Fitness Pty Ltd
Miranda works in a gym owned and operated by Karen, called 7 Day Fitness. When Miranda was offered casual employment, Karen said that Miranda could have the job, but the job offer meant that Miranda:
- might not receive shifts every week, or on regular days each week;
- can refuse offers to come in and work;
- will work only when she is required by the business, due to operational requirements or to cover absences;
- will be a casual employee; and
- will be paid a casual loading.
When Miranda accepted this offer, Miranda became a casual employee because she had no “firm advanced commitment” of ongoing work.
However, after a time, because Karen is impressed by Miranda, 7 Day Fitness has to cover the resignation of a full-time employee, and Miranda has worked for:
- at least 12 months; and
- in the last 6 months of that time, has worked a regular pattern of hours without significant adjustment and on the same days.
Karen must therefore make an offer to Miranda to convert Miranda’s casual employment to permanent employment within 21 days of the end of the 12-month period.
Because Miranda has been working 38 hours per week, the offer must be to full time employment. If Miranda regularly worked fewer than 38 hours per week, however, she must be offered permanent part time employment, on the basis of hours worked.
If Miranda is offered a permanent position, she must respond within 21 days. If she doesn’t respond to the offer within 21 days, she is deemed to have declined it.
If, during the 21-day period at the end of Miranda’s 12-months of casual employment, Karen makes the decision to close her gym in the next 12 months, Karen doesn’t need to make an offer to Miranda to convert to permanent employment. This would also be the case if Miranda’s hours were significantly reduced because the gym will no longer be open more than 3 days per week. If these things happened, Karen would be required to notify Miranda in writing that the offer to convert to permanent employment won’t occur, and set out the reason why and consult with Miranda about the matter.
It’s important to note that Miranda retains a right to request to be converted to permanent employment if she can satisfy the 6 months of regular pattern of hours, or regular days of employment, without significant adjustment, unless she has previously refused an offer to convert to permanent employment.
Please note that this change is in a transition period but is an obligation on your business as at 27 September 2021.
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If you have any questions about casual conversion any other employee relations matter, please do not hesitate to contact the team at FCB Group.