Changes to casual employment
What your business should know
In late March 2021, the Federal Government passed legislation to amend the Fair Work Act 2009 with significant changes to casual employment.
These changes, which came into effect on 27 March 2021, specifically relate to workplace rights and obligations for casual employees.
If you’re an employer of casual employees, you have several obligations that need to be met, with a transition period of 6 months available to enable time to implement any required changes.
What are the changes to the Fair Work Act 2009?
There’s three main aspects of the Fair Work Act 2009 that have been amended in relation to casual employees:
A definition of a ‘casual employee’
The Act now includes a statutory definition of a ‘casual employee’: “A person is a casual employee if they accept a job offer from an employer knowing that there is no firm advance commitment to ongoing work with an agreed pattern of work.” (Source: fairwork.gov.au) This definition also covers existing casual employees, employed prior to 27 March, whose initial employment offer meets this definition.
An employee will continue to be a ‘casual employee’ until they either become a permanent employee through casual conversion; they are offered and accept the offer of full-time or part-time employment; or they cease employment with the employer.
When determining if there is a “firm advance commitment to continuing and indefinite work according to an agreed pattern”, employers should consider the following:
- whether the employer can elect to offer work and whether the person can elect to accept or reject work;
- whether the person will only work as required;
- whether the employment is described as casual employment; and
- whether the person will be entitled to a casual loading or higher casual rate.
The benefit of this definition is that determining if a worker is casual occurs when they are engaged, regardless of what happens at a later date. Employment contracts or engagement letters are therefore even more critical for casual engagements.
Casual Employment Information Statement
A new ‘Casual Employment Information Statement‘ has been introduced which outlines:
- the above definition of a casual employee
- when an employer does or doesn’t have to offer casual conversion
- when a casual employee can request casual conversion
- casual conversion entitlements of casual employees employed by small business employers
- the role of the Fair Work Commission to deal with disputes relating to casual conversion
Casual conversion – becoming a permanent employee
The amendments also include a new entitlement providing casual employees a pathway to become full-time or part-time (permanent) employees, referred to as ‘casual conversion’.
What does it mean for employers?
So, what do employers need to do? Although the new casual conversion requirements incorporated into the Act and National Employment Standards (NES) do not apply to businesses with less than 15 workers (small businesses), the requirements of relevant Awards still need to be followed. There’s several areas that employers of casual employees need to address:
Requirement to provide ‘Casual Employment Information Statement’
Under the Fair Work Act 2009, now employers need to provide a copy of the new ‘Casual Employment Information Statement‘ in person, by mail, or email with a link to Statement on the Fair Work website.
Small business employers need to provide this to existing casual employees (employed before 27 March 2021) as soon as possible after the effective date of 27 March 2021.
All other employers are to provide existing casual employees (employed before 27 March 2021) a copy of the Statement as soon as possible after 27 September 2021.
Offering permanent employment
When a casual employee has worked for their employer for more than 12 months, has worked a regular pattern of hours for at least the last 6 of those 12 months on an ongoing basis, or could continue working the same hours as a permanent employee – the employer (excluding small business employers), must offer their casual employee the opportunity to convert to full-time, or part-time (permanent) employment, unless they have ‘reasonable grounds’ not to offer the casual conversion.
Next steps for employers?
The amendment came into effect on Saturday 27 March, and there’s a transition period of 6 months for employers to implement any required changes to meet their obligations by 27 September 2021.
Employers should undertake a review of their existing internal policies and procedures for casual employees to ensure they accurately reflect the definitions of a casual worker, and determine whether their employment terms meet the new statutory criteria. Employment agreements or contract templates should also be reviewed to ensure they reflect the changes and are clear about how you intend to manage the worker.
Where casual employees have been working for more than 12 months, have worked a regular pattern of hours that don’t change significantly week to week, who have been working this pattern for at least the last 6 of those 12 months, or could continue working the same hours as a permanent employee – the employer must offer the opportunity to convert to full-time, or part-time (permanent) employment.
You will also need to have processes in place to track how long workers have been employed and identify how you will assess and communicate casual conversion eligibility. As with all employment-related matters, these processes should occur in consultation with workers and be formalised in writing.
Talk to us
If you’d like to understand more about these significant changes, and what this means for your specific business, talk to us.
We can help you review your existing HR policies and procedures and employment agreements to ensure they meet the relevant requirements, or help you to develop new employment agreements.