Thousands of casuals could choose to become permanent employees under new IR policy

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More than 850,000 casual workers on regular hours will gain the right to become permanent employees under a Labor plan that aims to stop employers “double-dipping” by hiring a reliable workforce but not paying entitlements.

The federal government plans to close a legal loophole by legislating a definition of casual workers that will be tied to whether they work regular or irregular hours and have advanced notice of their shifts.

About 850,000 casual workers who have regular hours will be eligible for permanency, and can choose to give up their casual loading rates in exchange for sick pay and holiday leave.Credit: James Brickwood

The workplace reform acts on Labor’s election promise to introduce an objective test for classifying casual workers and reverses the former Coalition government’s reforms, which defined casual workers based on their job description.

About 850,000 casual workers who have regular hours will be eligible for permanency, and can choose to give up their casual loading rates in exchange for sick pay and holiday leave. Workers won’t receive any backpay, and they won’t be forced to convert from casual to permanent if they don’t want to.

The Business Council of Australia is resisting the change, with chief executive Jennifer Westacott this month claiming that higher take-home pay and flexible work was at risk. “The government’s intentions on casual work would engulf businesses, particularly small businesses, in red tape and paperwork, complicating how they provide the services and convenience people expect,” she wrote in The Australian Financial Review.

But Workplace Relations Minister Tony Burke will tell an audience at the Sydney Institute on Monday that some employers are double-dipping, while there are casual employees on permanent hours who “desperately want security”.

“Many casuals won’t want a permanent job. If you’re a student or just working a casual job to make some extra money, this change won’t matter to you. But there are casual workers who are trying to support households,” Burke will say, according to excerpts of his speech.

“They’re being used as though they’re permanent workers and the employer is double-dipping – taking all the advantages of a reliable workforce and not providing any of the job security in return. That loophole needs to be closed.”

While details of the legislation are still being finalised, Burke told Sky News on Sunday that he wanted to return to the definition of casual work that existed two years ago, before the High Court decided contracts had primacy in determining the nature of someone’s employment.

He said most casuals would prefer to keep the loading, which is often about 25 per cent, but a minority lacked job security while trying to hold up the expenses of an entire household.

“For those people, some of them would rather … switch to being a permanent, lose the loading, but actually, on an ongoing basis, have the guarantee of the hours and have the guarantee of leave if they’re sick or if they’re caring for [someone]. We’re wanting to create that right.”

He also rebuffed the idea it would cost billions of dollars in backpay. “What we’re saying is, if you want to apply to switch from being a casual to a permanent because you are working permanent hours anyway, then from the time you change, you no longer get the loading. You just change to being a permanent from then on,” he said.

“Because you’re swapping from … loading to leave, there’s actually zero cost to the economy, but a huge change in job security for people who need it.

The government will introduce the legislation in December. If it passes by the end of the year, it could come into effect some time in 2024.

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