Casual Employment Changes

Recent amendments to the Fair Work Act 2009 (Cth) (‘FWA’) have introduced a casual employee conversion scheme to the National Employment Standards (‘NES’). Employers should be vigilant and assess their casual employees to determine whether they fall within the new FWA definition of casual employment. If so, they may be eligible for casual conversion. Small businesses owners are not required to make this assessment or offer conversion, but their employees are still entitled to request permanent employment. A small business is classified as having fewer than 15 employees.

The Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 (Cth) (‘Amendment Act’) now provides that a person is a casual employee if they commence employment without the expectation of ongoing work and set working patterns. A person will be classified as a casual employee until they cease employment with their existing employer, or they become a permanent employee; either through the conversion scheme or the independent offer of part/full-time work. Employers are now also able to set-off casual loading rates against claims by casual employees for leave entitlements and redundancy pay.

Casual employees are entitled to permanent employment if they satisfy the new criteria under the NES. Employers are obligated to offer permanent employment within 21 days of the employee’s 12 month working anniversary if the employee has:

• worked for their employer for 12 months;

• worked regular hours for at least 6 of those 12 months; and

• the capacity to continue working those hours as a permanent employee.

Permanent employment is defined as either part-time or full-time work.

If an employee does not respond within 21 days of the offer being made, employers are entitled to assume that the employee has declined the offer to convert.

Employers are not required to offer casual conversion if they have ‘reasonable grounds.’ This applies where the employee’s position will no longer exist within 12 months, the expected hours of work will significantly reduce within 12 months, or the expected days or times of work will change significantly. Employers are also not obligated to offer conversion if an employee does not meet the set criteria. In either of these circumstances, employers must provide a refusal notice to their employee within 21 days of the end of the 12 month period.

The Amendment Act also introduced a Casual Employment Information Statement that employers must distribute to all casual employees. This Statement should be provided to new casual employees before they commence casual employment, or as soon as practicable afterwards. The Statement must also be provided to existing employees.

Should you have any queries in relation to these recent changes to casual employment, we would be happy to assist.