What do you need to know?

From 26 August 2024 the following significant changes will apply in relation to casual employees:

1. a new definition of casual employment will come into effect;

2. employers will no longer be required to make an offer to casual employees to convert to part time or full time employment or notify casual employees why no such offer would be made; and

3. employers will be not only be required to provide casual employees with a new ‘Casual Employment Information Statement’ before or soon after starting casual employment, as is currently the case, but also at the 6 month anniversary of employment and at each 12 month anniversary during which the worker is employed.

The meaning of casual employment has long been contested because of a lack of any statutory definition. In 2021, the High Court decision in Workpac Ltd v Rossato & Ors [2021] HCA 23, followed by the then Government’s amendments to the Fair Work Act, saw the introduction of a definition of casual employee at section 15A. Effectively, a casual employee was someone who:

• received an offer of employment that made no firm advance commitment to continuing and indefinite work

• accepted the offer and was employed as a result.

Also relevant under section 15A was whether the employee could accept or reject work, the employment was described as casual, and the employee would be entitled to a loading or rate payable to casuals.

This article will help you understand the new definition of casual employment and your obligations.

Definition of casual

Under the amendments to the Fair Work Act 2009 (Cth), no single factor will be decisive in determining whether an employee is casual. Both the actual contract and post-contractual conduct that occurs once employment commences will be relevant.

Casual employment is defined as a worker who has no advance commitment to continuing and indefinite work and is entitled to a casual loading or casual rate of pay under a relevant instrument.

The assessment of ‘no advance commitment’ considers the ‘real substance, practical reality and true nature of the employment relationship’, and criteria including whether:

• the employee can choose to accept or reject work when offered,

• it is reasonably likely that continuing work would be available in the future,

• there are permanent employees performing the same kind of work; and

• the employee has a regular pattern of work.

Except for certain employees of higher education institutions, the amendment allows for an employee on a fixed term contract to also be a casual employee, if they otherwise satisfy the requirements to be considered casual employees.

Conversion from casual employment

The amendments remove the obligation on employers to make an offer to casual employees to convert to part time or full time employment or notify casual employees why no offer to convert would be made.

It is important for employers to remember that the existing obligations continue to apply up to and including 25 August 2024.

However, from 26 August 2024, the onus will shift to casual employees who can give the employer a written notification that their employment is no longer casual (similar to making a request to change their employment status) after they have been employed for at least 6 months (or 12 months for employers less than 15 employees). Notifications can also be made following a further period of 6 months.

An employer must respond to an employee’s notification in writing within 21 days either accepting the notification or advising the notification is not accepted on one or more of the following grounds:

1. the employee’s current employment relationship with the employer still meets the criteria of casual employment provided by the amendments;

2. there are fair and reasonable operational grounds for not accepting the notification;

3. accepting the notification would result in the employer not complying with a recruitment or selection process required by or under a law of the Commonwealth or a State or a Territory.

A worker who, when they commence employment, meets the criteria for a casual employees as specified in the amendments, will remain a casual employee until their employment status is changed to full time or part time employment:

1. following an employee’s written notification/request that employment is no longer casual employment;

2. by an order of the Fair Work Commission;

3. under the terms of an applicable modern award or enterprise agreement

4. by acceptance of an offer of alternative employment other than on a casual basis.

Next steps for employers

Employers must ensure that they comply with their existing obligations continue to apply up to and including 25 August 2024.

Employers should assess their casual workforce to apply the impact of the new provisions. Where employees are engaged genuinely on a casual basis, the new provisions will have little effect, and employers will benefit from the removal of the obligation to make an offer to convert or notification why no offer will be made.

Employers should look at engaging employees on a fixed-term or permanent basis to fulfill short-term workforce requirements. Casual employees should only be engaged where there is a genuine requirement without a firm advance commitment to continuing and indefinite work.

Please contact CER for advice specific to your circumstances. NOTE: This advice is general in nature. If you require assistance with casual conversions or employment contracts, please contact CER’s Employment Relations Specialists on (02) 9189 5999 or enquiry@cer.catholic.org.au.