How do the Casual Employee Changes Affect You?

How do the Casual Employee Changes Affect You?

How do the Casual Employee Changes Affect You?

Changes TO THE FAIR WORK ACT – MARCH 2021

In an effort to provide business with more confidence to employ people under casual and part time employment arrangements, a number of significant changes were made to the Fair Work Act, effective 27 March 2021, by the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021.

It appears that the Federal Parliament have taken the May 2020 decision in WorkPac Pty Ltd v Rossato (which was under appeal before the High Court at the time) into consideration in making changes to employment law.

The decision in Rossato had the effect that an employee who accepted casual employment, but was then engaged in such a way that they had either certainty about future work, or the days and hours of work that may be required of them, was in face a permanent employee entitled to paid leave entitlements. 

Unfortunately,  the Court went on to find that neither the contract of employment nor the law was sufficiently clear to allow the employer to off set casual loadings already paid to the employee against those leave entitlements. 

The concerns raised after this decision revolved around an employee’s ability to effectively ‘double dip’ against entitlements paid and the potential cost to employers with large casual work forces. 

WHO IS CONSIDERED A CASUAL EMPLOYEE?

Casual employment was not defined under the Fair Work 2009 and remained a term subject to interpretation of the Courts, until now.

This new definition of ‘casual employee’ applies across all Modern Awards, and all employment agreements not covered by an Award. 

15A Meaning of casual employee

(1) A person is a casual employee of an employer if:

(a) an offer of employment made by the employer to the person is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person; and

(b) the person accepts the offer on that basis; and

(c) the person is an employee as a result of that acceptance.

(2) For the purposes of subsection (1), in determining whether, at the time the offer is made, the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person, regard must be had only to the following considerations:

(a) whether the employer can elect to offer work and whether the person can elect to accept or reject work;

(b) whether the person will work as required according to the needs of the employer;

(c) whether the employment is described as casual employment;

(d) whether the person will be entitled to a casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument.

(3) To avoid doubt, a regular pattern of hours does not of itself indicate a firm advance commitment to continuing and indefinite work according to an agreed pattern of work.

(4) To avoid doubt, the question of whether a person is a casual employee of an employer is to be assessed on the basis of the offer of employment and the acceptance of that offer, not on the basis of any subsequent conduct of either party.

(5) A person who commences employment as a result of acceptance of an offer of employment in accordance with subsection (1) remains a casual employee of the employer until:

(a) the employee’s employment is converted to full-time or part-time employment under Division 4A of Part 2-2; or

(b) the employee accepts an alternative offer of employment (other than as a casual employee) by the employer and commences work on that basis.

WHAT DOES THIS MEAN FOR SMALL BUSINESS?

As a small business owner, you can now employ someone as a casual with confidence that the casual loading you pay them (25% under most Modern Awards) as compensation for not accruing paid leave entitlements, can be applied against any leave entitlements the employee might seek to claim as a permanent employee in the future. 

With clarity around the conversion from casual to permanent employee, the risk of employees claiming that they should be deemed a permanent employee in the future is also now reduced. 

 

Conversion to permanent employment is now simpler 

Under Part 2-2 of the Act, if you employ someone as a casual for 12 months and they have a regular pattern of employment during the last 6 months of that period, you must offer them conversion to permanent employment (attracting paid leave entitlements). 

The offer of conversion should be made at the end of any 6 month period where the regular pattern of employment they have undertaken could be converted to permanent part time or full time employment ‘without significant adjustment‘. 

The offer must be made in writing within 21 days of the end of the first 12 months of employment. This provision does place an obligation on an employer to offer a longer term casual who has secured a regular pattern of employment over 6 months after the initial 12 months of employment.  

If an employee rejects the offer of conversion, they remain a casual employee. 

The requirement to make an offer of conversion doe not apply:

  • to small business operators with less than 15 employees
  • if there are reasonable grounds not to make the offer (some examples are given in the Act).

If an employer decides not to offer conversion, the decision not to make an offer must also be given to an employee within 21 days of the end of their first 12 months of employment. 

An employee retains the right to ask for conversion at the end of any 6 month period of regular pattern of employment after the initial 12 months, provided that:

  • the employee has not previously rejected an offer of conversion
  • the employer has not previously issued a notice of grounds for not offering a conversion
  • the request is made more than 21 days after the employees first 12 months of employment

The Act specifically allows for employers and employees to reach agreement on conversion outside the provisions of the Act.  

Casual Employee Information Statement – Fair Work

When do you have to give a CEIS to an employee?

As an employer you will be familiar with the obligation to provide an Fair Work Information Statement to new employees which explains the National Employment Standards (NES).

With the inclusion of a definition of casual employment, employers now also have the obligation to provide a Casual Employee Information Statement to new casual employees. 

Small business employers (less than 15 employees) need to give their existing casual employees a copy of the CEIS as soon as possible after 27 March 2021.

Other employers have to give their existing casual employees a copy of the CEIS as soon as possible after 27 September 2021.

Need help as an Employer?

If you are struggling to understand your obligations as an employer, or just want to check how the recent changes in law impact you, get in touch through our contact form or by booking an appointment. 

Coaches and Consultants – 3 Legal Case Studies

Coaches and Consultants – 3 Legal Case Studies

Coaches and Consultants – 3 Legal Case Studies

Coaches and Consultants – 3 Legal Case Studies

The challenge with coaching or mentoring, whether that’s life coaching or business coaching, is that your students often expect you to do it for them instead of them doing it themselves.

This is completely contradictory to the sports setting where people understand that the coach is the person who does not end up on the field, who is not part of the game, and who supports the players get the best out of themselves.

As a coach you are likely to have a variety of offerings for your clients, which might include any one or more of:

  • downloadable, self-paced individual programs
  • moderation of online forums
  • facilitation of mastermind groups, online or offline
  • individual coaching sessions, in person or via technology
  • a combination of individual and group coaching sessions, in person or via technology 
  • face-to-face events 
  • consultancy 

Some of the coaches we work with have limited number high end programs which provide a combination of the different offerings above.

Due to the variety of different offerings the coaches we work with provide, rather than one case study, we will share three snap shots of the problems some of our coaches have encountered, and the solutions we provided.

We would also like to thank Si Harris, Business Strategist, for requesting these case studies.

PROBLEM 1 – managing expectations

Your advertising, and your Coaching Services Agreement should manage the expectations of your client. You should be clear before coaching commences that it is the client’s responsibility to get what they can out of the coaching program, and if the client does not participate fully, they will not get the results they expect.

It is also important that you carefully assess the capabilities of your potential client before agreeing to provide services to them. If it were obvious before coaching commenced that your potential client could not afford your services, you run the risk of ending up in dispute over payment. Similarly, if you recognise that your potential client has a particular personality trait or disorder that you do not want to manage, or do not have the qualifications or experience to manage, it is best not to start the relationship at all.  

CASE STUDY 1 – Complaint about Services

We have a coach who focuses on assisting their clients to develop a business plan. Business planning is not an easy process. It requires time and effort. This coach provides a 13-week program with the promise that at the end of the program their client would have a completed business plan.

The problem they faced was clients seeking refunds at the end of the program if they were not happy with their business plan.

We restructured the coach’s Coaching Services Agreement to clearly set out and include what the coach provided, what they did not provide and what actions the client was responsible for undertaking throughout the coaching program. The client had to sign up to their responsibilities and was responsible for completing different sections of a template business plan from the start of the coaching relationship. We also prepared a disclaimer for our coaching client’s website which clearly set out the limits of their services, and the obligations of the participant. The disclaimer was easily accessible through the footer of the website, reflected the terms of the Coaching Services Agreement and was in unambiguous plain English terms.

This agreement was tested by almost the first client who signed it.

That client turned up every week for thirteen weeks and consumed more than the allocated 90 min window of time allowed by the coach but failed to do any homework in between sessions and made no effort to prepare their own business plan.

The coach, just like the coach on a playing field, was there each week, supporting from the sidelines, encouraging the client to play, but the client consumed the attention only, and failed to play the game.

At the end of the program the client demanded a refund because they did not have a completed business plan that they were happy with, or at all.

The client had signed the Coaching Services Agreement, in that instance in wet ink, and was bound by its terms. They had also claimed they relied on representations on the website, enabling our client to also point to the disclaimer.

The coach was able to simply direct the client back to the plain English, unambiguous responsibilities the client had agreed to at the start of the relationship through the Coaching Services Agreement and disclaimer, and the complaint about services and demand for refund was not pursued. 

Note that it is important you fulfil on the promises you make about the delivery of your programs.

A 2011 Queensland QCAT series of cases involving Venzin Danielli Pty Ltd as defendant, required the coaching services provider to refund to four participants 77.5% of their program fees after the participants withdrew part way through the program for the provider’s “failure to provide the various benefits that were represented as flowing from participation in the Inspire Series program”. 

In that case, the coaching service provider over promised and under-delivered. Make sure your advertising is accurate and does not over promise what you can deliver. 

PROBLEM 2 – REFUNDS

Australian Consumer Law Guarantees

Before looking at case studies, it is important you know that a ‘no refunds’ policy is not supportable under Australian Consumer Law.  You CAN advise clients that a refund will not be provided if they change their mind about completing the program, there is a difference. 

If a provider of services with a value of less than AU$40,000 does not meet the following consumer guarantees:

  • provision of services with due care and skill
  • provision of services in a timely manner
  • provision of services that are fit for purpose

then the purchaser has a right to request a refund or replacement of the services.

For a major fault (an irreparable fault or collection of faults that would have influenced the purchaser not to buy in the first place if they had known about those faults), the purchaser is entitled to a refund.

High-end Coaching Programs

High end coaching programs are often year long programs with limited places and application processes before acceptance. It is not uncommon for coaches offering high end programs to allow participants to pay by instalment over time, rather than require the full amount up front.

So, what happens when someone gets part way through a coaching program and discovers they just do not want to finish it?

The first risk mitigation strategy we recommend for high end coaching programs is a clear application process, including a written, signed application accepting the terms and conditions of the program, and a face-to-face interview process. Applications and interviews can be conducted electronically. Applications can be signed electronically.

During the application process, as a coach, you can validly ask that your potential client tell you that they have considered the cost of the program and that participating in the program is not going to affect them badly financially.

Some providers we work with may it clear that to get the most out of the program, the participant will need to have further money to invest – say in set up costs for a new business or development costs in a property purchase – and the coach will also ask for confirmation that the possible further investment is affordable for the potential client.

CASE STUDY 2 – Refund request, or stop payment request, part way through program

So, what do you do when you get a request for release from a program that has not been paid in full, or a refund part way through a program? This happens for our coaching clients once or twice a year. 

When it comes to the Coaching Services Agreement, we make it clear that participation is limited, and the place purchased means someone else misses out. On that basis and taking into consideration the costs attributable to their participation, the whole of the program must be paid, whether paid by instalment or in full up front.

We ensure the wording is very clear regarding instalments and cannot be mistaken for a monthly fee. We also suggest a provision that makes the full balance of course fees payable if an instalment is not made on time. This allows for immediate debt recovery instead of having to wait until the end of the period for payment of the instalments.

If your Coaching Services Agreement has clear terms about the payment for a program, you will not be obliged to refund any amount received, or to forgive any payments still outstanding.

A 2015 Victorian VCAT case of Quick Coach Pty Ltd v Papalia made it clear that return of signed terms and conditions and a deposit, together with receipt of materials, attendance at some workshops and access to a website built for the client (although not the whole of the program), were sufficient to support an order that the client pay for the program in full.  

However, if your client is in genuine personal difficulty (such as having lost income due to a downturn resulting from COVID, or been diagnosed with cancer) then, regardless of the terms of your Coaching Services Agreement, you might consider releasing the person from the program without further payment, or partial refund of the program, or deferral of participation until a later date. Any agreement not to require full payment, or to defer participation, must be documented in a deed signed by you and the client.  

We have assisted our coaching clients to recover unpaid fees, and have also assisted clients to prepare a deed of release of a person from their program.

We have also had a client have to refund a portion of fees for a program where a tribunal expressed a view that the cost of the program was disproportionate to the benefits received, and where there were allegations of undue influence or high pressure sales tactics used in the sign up process. 

PROBLEM 3 – Protecting intellectual property

It is important to document your ideas and create tangible material as part of your programs. This can include printable materials like workbooks, or downloadable materials like PowerPoint presentations, or materials for online consumption like video or audio materials.  

Once you have any sort of material that can be reproduced, you can protect it under copyright law. Enforcing protection of your work may require you to start legal proceedings, but if you have already included specific terms in your Coaching Services Agreement about the use of your copyright material, you can specifically include all of the materials you use in your coaching delivery. 

Yes, someone can still take your ideas and run with them, but they won’t be able to closely copy what you have created, or you will be able to pursue them for infringement of your rights. If you can apply catch-phrases to what you have created, like Porter’s Five Forces Framework, then it can be easier to protect your ideas.

CASE STUDY 3 – What can you do with Coaching clients, or consultants who steal your stuff?

We had a new client who had developed and delivered a leadership program to an organisation without receiving payment of any part of the $15,000 fee up front, and without a clear agreement with the organisation. The head of the organisation refused to pay for the training delivered, rebranded the slides used in delivery of the program and started offering the program as something developed by the organisation.

Our client did have the option to start legal proceedings to recover payment for delivering the training, and for copyright infringement but was concerned about taking action to the expense and fear that the head of organisation’s partner was also a lawyer, and the organisation would probably not incur legal fees in defending that claim.

Unfortunately, our client decided not to take action and treated the event as an expensive lesson in business.

How could our coaching client have done it better? Our coaching client’s position would have been stronger:

  1. with a clear Coaching Services Agreement including specific provisions regarding copyright,
  2. if a wet ink or electronic signature was required on the Coaching Services Agreement before the booking was confirmed, or the agreement included other provisions to make it binding upon receipt of payment of deposit,
  3. if the Coaching Services agreement included a specific provision limiting the number of people to receive that coaching for the specified fee,
  4. if the Coaching Services Agreement required payment up-front of expenses (travel was involved) and a deposit before delivery, and
  5. if the Coaching Services Agreement included fixed dates for payment of the balance of fees, and provision for the application of interest and recovery of costs if debt recovery had to be pursued.

TAKE AWAY POINTS FOR COACHES AND CONSULTANTS –

  • Share a clear Coaching Services Agreement with your clients before the point of purchase
  • Ensure your agreement and advertising are consistent and accurate
  • Protect your intellectual property
  • Seek at least part payment up front
  • Ensure that payment terms are clear around the full amount to be paid, due dates for payment and any interest or acceleration of payments that apply if payments are not made when due.
  • Include a disclaimer to explain what you do not do for your clients
  • Seek applications from potential high end clients to check their ability to participate fully, and your ability to work with them.

Need Support as a Coach?

Would you like to improve your Coaching Services Agreement, your Online Program Terms & Conditions, your Disclaimer or  your Privacy procedures?  Let us know through our contact form or by booking an appointment.