On 26 March 2021, the Fair Work Act 2009 was amended to change the workplace rights and obligations for casual employees in Australia. It is important for all employers to be aware of the changes which include:
- a definition of casual employment;
- a pathway for casuals to move to permanent employment; and
- the requirement to provide new and existing staff with a Casual Employment Information Statement.
Definition of Casual Employment
Under the new definition, a casual employee is defined as a person who is offered and accepts employment on the basis that the employer makes no firm advance commitment to continuing and indefinite work.
In assessing whether an offer is without ‘firm advance commitment’, only the following factors are considered:
- whether an employer can choose to offer the employee work and whether the employee can elect to accept or decline the work;
- whether the employee will work only as required according to the employer’s needs;
- whether the employment is described as casual employment; and
- whether the employee will receive a casual loading.
The new definition provides greater certainty for employers when considering whether the workforce consists of genuine casuals. It is the offer and acceptance of employment that is the focus, rather than any subsequent conduct of the employee’s actual pattern of work.
Pathway for Casual Employees to Move to Permanent Employment
All casual employees now have the right to become permanent employees in some circumstances. This is known as ‘casual conversion’. Access to the conversion provisions are outlined below:
1. Large Business Employers (15 or more employees)
Large employers are obligated to offer casual employees conversion to permanent employment (full-time or part-time), if the employee:
- has been employed for at least 12 months; and
- has worked a regular pattern of hours on an ongoing basis for at least the last 6 months of that period, which, without significant adjustment, the employee could continue to work as a permanent employee.
An offer for casual conversion must be made in writing by 27 September 2021 or within 21 days after 12 months of employment, whichever is the later.
Please be aware that employers are not required to make an offer of employment permanency where there are “reasonable business grounds” not to, including where:
- the position will cease to exist within 12 months;
- the hours of work the casual would perform will reduce significantly within the 12 months; or
- the days and or times that the casual is required to work will change significantly.
2. Small Business Employers (less than 15 employees)
Small business employers with less than fifteen employees are not obliged to offer casual conversion to it’s casual employees. Whilst the obligation to offer casual conversion does not apply to small business employers, their casual employees are still entitled to request casual conversion.
3. Casual Employee Right to Request Conversion
Eligible casual employees will be able to make a request to their employer for casual conversion after 12 months of employment. A conversion request can be made by eligible employees to small and large business employers. Employers will not be able to refuse a conversion request from eligible employees unless there are reasonable business grounds.
Casual Employment Information Statement
The Casual Employment Information Statement is to be provided to existing and new casual employees. The statement is available from the Fair Work website: www.fairwork.gov.au
Action Required by Employers
All businesses employing casual workers will need to take some action as a result of the casual employment changes, including to:
- Review their systems of engagement of casual employees, including template contracts, to ensure compliance with the new obligations.
- Examine the basis of past offers of employment made to and accepted by casuals, to assess if past offers meet the new definition.
- Provide all existing and new casual employees with a copy of the Casual Employment Information Statement.
In addition, large business employers with 15 or more employees will need to:
- Identify long term eligible casuals and complete the process to offer casual conversion prior to 27 September 2021.
- Establish new processes and maintain good employee records to ensure continued compliance with the casual conversion clauses.
If you require further assistance regarding the casual employment reforms, please contact our office or your employment specialist.