Major developments in relation to the rights of casual employees in Australia have come into effect as a result of recent amendments to the Fair Work Act 2009 (Cth) (FWA). Such amendments provide a new definition of ‘casual employee’ as well as a clearer pathway for casual employees to transition into permanent roles and came into effect as of 27 March 2021.
Casual Employee Definition
Under Australian law, a person will now be considered to be a casual employee where:
- they are offered a job;
- the offer does not include a firm advance commitment that the work will continue indefinitely with an agreed pattern of work; and
- the offer is accepted knowing that there is no firm advance commitment.
Accordingly, the determination of whether a person is a causal employee or not will occur at the point of offer and acceptance of employment.
In determining whether an offer includes firm advance commitment to continuing and indefinite work, a court may have regard to:
- whether the employer can elect to offer work and whether the person can elect to accept or reject work;
- whether the person will work as required according to the needs of the employer;
- whether the employment is described as casual employment; and
- 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.
The FWA now stipulates that businesses with over 15 employees are required to convert casual employees to full or part time roles provided they:
- have been employed for at least 12 months;
- have worked a regular pattern for the last 6 months; and
- their regular hours could continue as a permanent employee without significant changes.
Usually, employers are required to do this by way of a written offer within 21 days of the 12-month employment period. Currently, a six-month grace period (until 27 September 2021) has been granted to employers to assess whether an offer is necessary. If an employee does not meet the requirements, they must be informed in writing within 21 days of making the assessment.
The requirement to make an offer does not apply to small businesses (less than 15 employees), however, employees are entitled to make a request for conversion if they meet the criteria outlined above at any time after 27 September 2021. This request can only be denied by an employer if there are reasonable grounds. If it is denied, an employee cannot make another request for 6 months.
Casual Employment Information Statement
Employers are now required to give all current and future casual employees the Casual Employment Information Statement provided by the Fair Work Ombudsman as soon as possible for small businesses and as soon as possible after 27 September 2021 for all other businesses.
If a disagreement arises regarding the conversion of a casual employee to a permanent position, the FWA now provides that, if such a dispute cannot be resolved at the workplace level, disputes should be resolved through the Fair Work Commission and Federal Circuit Court.
Set off of casual loading and employee entitlements
The FWA also now includes provisions which will allow employers and courts to set off any casual loading paid to an employee who has been misclassified as casual against claims for leave and other entitlements. This prevents employees from ‘double dipping’ and receiving both casual loading payments and employee entitlements such as annual leave and sick leave.
These provisions can be applied retrospectively. Accordingly, it is possible for employers and the courts to set off casual loading paid to an employee before the amendments to the FWA came into effect. This applies regardless of whether the employee is still employed by the employer.
Recommendations for employers
Employers should revise their existing casual employment contracts against the new definition to ensure employees are properly categorized. In doing so, employers should also take note of casual employees that could be entitled to offers or requests for conversion and assess whether they are eligible.
If you have any questions or concerns related to casual employment, please do not hesitate to contact us.