Recent Changes to Casual Employment

Earlier this year, the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 (Cth) was introduced resulting in various amendments to the Fair Work Act 2009 (Cth) (Act) regarding casual employees and their employment. Below is a brief overview of some of the amendments that have been made to the Act.

Definition of Casual Employment

One of the amendments made to the Act was the addition of a definition of Casual Employee. An employee is now defined as a casual employee if:

  • 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
  • the person accepts the offer on that basis; and
  • the person is an employee as a result of that acceptance.

At the time of employment, the following must be considered to determine whether the employer has made no firm advance commitment to continuing and indefinite work:

  1. whether the employer can choose to offer work, and whether the employee can choose to accept or reject the work offered;
  1. whether the employee will work as required according to the needs of the employer;
  1. whether the employment is described as casual employment; and
  1. whether the employee will be entitled to a casual loading or a specific hourly rate for casual employees in accordance with the offer of employment and/or a relevant Modern Award.

The recent amendments also state that a regular pattern of hours does not necessarily indicate a firm advance commitment to continuing and indefinite work. Further, in deciding whether an employee is a casual employee, the conduct of the employer and employee is only to be considered with respect to the offer and acceptance of employment.

Casual Employment Information Statement

The Fair Work Ombudsman has published a Casual Employment Information Statement that must be provided to all casual employees before, or as soon as practicable after, the employee starts employment with the employer. Small business employers who already employ casual employees were required to provide the Casual Employment Information Statement to their casual employees as soon as possible after 27 March 2021. All other employees are required to provide a copy of the Statement to their employees as soon as possible after 27 September 2021. A copy of the Casual Employment Information Statement can be found at the Fair Work Ombudsman website.

Casual Conversion

Although amendments were previously made to various Modern Awards to include provisions relating to an employee’s right to request casual conversion, similar provisions have now been included in the Fair Work Act.

Casual conversion refers to an offer of full time or part time employment to a casual employee who works a regular pattern of hours on an ongoing basis. The new casual conversion provisions in the Fair Work Act requires employers, who are not small business employers (a small business employer is defined as an employer with fewer than 15 employees), to make an offer of casual conversion to any casual employee who:

  1. has been employed by the employer for a period of at least 12 months; and
  2. has worked a regular pattern of hours on an ongoing basis during the previous six months, and the employee could continue to work those hours as a full time or part time employee, without significant adjustment.

If a casual employee meets the above criteria, an employer must provide the employee with an offer in writing to convert to either full time or part time employment. The offer of conversion to full time or part time employment will depend on the hours worked by the employee in the preceding six months. This offer must be given to the employee within 21 days of the completion of the employees first 12 months of employment with the employer.

Once an employer has made an offer of casual conversion, the employee has 21 days to accept the offer. If the employee fails to accept the offer in writing within this timeframe, the employee is taken to have declined the offer.

There is an exception to making an offer of casual conversion to an employee if there are reasonable grounds based on facts that are known, or reasonably foreseeable, at the time the employer decides not to make the offer. A reasonable ground includes, but is not limited to:

  1. the employee’s position will no longer exist in the 12 months following the decision not to make an offer;
  1. the employee’s hours of work will be significantly reduced in the 12 months following the decision not to make an offer; or
  1. there will be a significant change in the days or times that the employee is required to work that cannot be accommodated within the employee’s availability.

If an employer decides that there is a reasonable ground to not make an offer for casual conversion, the employer must provide the employee with a written notice that includes the employer’s reasons for not making an offer within 21 days of the completion of the employee’s first 12 months of employment with the employer.

The amendments to the Fair Work Act also provide that a casual employee can request casual conversion if they meet criteria similar to the criteria discussed above. This provision allows employees of a small business employer to request casual conversion. However, employers are also able to refuse this request if they have reasonable grounds based on facts that are known, or reasonably foreseeable, at the time the employer decides to refuse the request.

Key Takeaways

Any business that employs casual employees should carefully consider the recent amendments to the Fair Work Act 2009 (Cth). Failure to comply with relevant employment laws can result in harsh penalties for employers, as well as an increased risk of future litigation from employees. If you have any questions or concerns regarding your obligations towards your casual employees, or your requirement to offer casual conversion, please contact one of our experienced solicitors or Book a Consultation now to book in a free 15-minute consultation with one of our experienced solicitors so that we can discuss the best way to protect your businesses’ future.