FWA, NES and contract/temp staff

[Moz]

Just wondering if anyone has looked into the implications of the Fair Work Act and the National Employment Standards (NES) for contract or temporary staff in the corporate.

It seems to me that there are now essentially just two classes of employee in the white collar sector - (normal) Employee or Casual, and there is no distinction between a full time employee and what many refer to as "temp" or "contract" staff. This means that "temp" or "contract" staff are entitled to the same minimum entitlements as a full time employee, including paid annual leave and paid personal leave (including sick leave).

The only workers excluded from these paid leave provisions would be casual workers and those who are working under a modern award which allows "cashing out" of their paid leave entitlements, which they have agreed to without any duress.

Are these assumptions correct?

[Chipmunk]

Hi Moz,

Wish it was that easy. A few questions for clarification.

Are you referring to temp staff sourced through an agency on a fixed term basis who is not directly employed by the employer (i.e 6 weeks coverage for an employee off on leave)?

Or people working on a fixed term contract directly with the company?

[Moz]

Hi Chipmunk,

I was actually thinking about people working directly for the company.

I assume if they are employed by an agency then it is the agency's responsibility?

Presumably the same FWA provisions would apply to an agency (as the Employer), just as they would to a company who employed temp or contract staff directly?

[Chipmunk]

Hi Moz,

People working directly for a company (if not on a casual basis) would still enjoy accrual of entitlements even if on a short term basis.

Under the Standard in the Workplace Relation Act annual leave and sick leave would only accrue after 4 weeks of service for fulltime and part-time staff. This changed under the NES where it accrues on a daily basis.

So if the person is employed on a full-time/part-time basis for 3 months, they would accrue AL that would need to be paid out at the end of their contract (either under the NES or a more generous provision under an award).

As for an agency employees, unless the person is directly employed by the agency on a FT/PT basis, the hourly rate they get paid hopefully coverers any entitlements for AL/PL

Hope that helps with your question.

[Moz]

Hi Chipmunk,

Thanks, it goes some way to answering my question

However, I can't see anything in the FWA or NES that discriminates between normal employers and recruitment (or labour hire) agencies which 'on-hire' individuals to another employer.

So if a normal employer cannot take someone on for 3 months on a "temp" basis and load their hourly rate in lieu of their leave entitlements, how can a recruitment agency employ someone and do that?

Or looking at it from the other side - if a recruitment agency can legally contract someone for 3 months and pay them a loaded hourly rate which compensates them for all leave entitlements, then why can't a normal company do that themselves?

[Chipmunk]

Hi Moz,

This appears to be a hole in the FWA (Or at least my understanding of the FWA 2009) in that under some awards you have casual conversion for long term casuals, or set limits on how long an employee can be a casual for, yet you get the situation where an employee of a labour hire firm can get shopped around from contract to contract with no hope of being converted to a FT/PT employee.

As for your question on casuals with a fixed term with a company, that’s something I will have to do some research on and get back to you.

[Moz]

This raises the question of the definition of "casual"

From what I have read someone who works fixed hours each week and is expected to turn up every day, as a "temp" on say a three month contract does, cannot be classed as "casual".

This is how the WA Govt define "casual" employment

Again, from what I understand from my own reading people are either "casual", in which case non of NES paid leave provisions apply, or they are "employees", in which case all of the paid leave provisions do apply, unless they come under an award which allows paid leave to be "cashed out", (which presumably applies to either a recruitment company or an normal employer).

I suspect we will soon see the courts deem a "casual" employee (who isn't really casual) to be a permanent employee of the end user of their labour, even if they have been working through a recruitment agency ...

[Chipmunk]

Your right about the fact that there is no clear definition of casual. Some casual employees thou may be afforded the protection of unfair dismissal.

Unfortunately, the Fair Work Act does not defined the term ‘casual employee’ (although it defines ‘long term casual employee’ for parental leave), nor does it provide a definition of the meaning ‘employed on a regular and systematic basis’.

Examples of casual arrangements that may exclude a person from unfair dismissal laws include a casual called in as required and who does not have rostered hours of work, or where a casual employee is required to contact the company at the beginning of each week to establish whether any work will be offered. The expectation of continued or ongoing employment is also a critical factor in determining the basis of a casual employee’s employment in these circumstances.

These things are usually assessed on a case by case basis, and will fall back on either the contract that’s offered and the terms contained within, or the establishment of a pattern of work over the course of time.

Hopefully in any future amendments these loopholes can be closed.