Employment law update: Changes to casual employment

A number of changes in relation to casual employment will be introduced in August of this year under the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 (Cth).

The changes are significant and the Fair Work Ombudsman Anna Booth has urged workplaces to ensure they are engaging with the new laws.

”Employers, employees and independent contractors need to understand the changes, which create new or changed responsibilities and rights in a range of areas,” she said.

”This sends a clear message and expectation – employers must invest the time and resources to meet their new legal obligations.”

Some of the changes include a new definition of casual employee and a new pathway for casual conversion.

Casual employee definition

On 26 August 2024, the Fair Work Act 2009 (Cth) (Act) will introduce a new definition of ‘casual employee’.

The new definition will mean an employee is only casual if:

• There isn’t a firm advance commitment to continuing and indefinite work (taking into account a number of factors, including the real substance, practical reality and true nature of the employment relationship); and
• They’re entitled to receive a casual loading or specific casual pay rate.

What is a firm advance commitment?

There are a number of factors to consider as to whether there is a firm advance commitment to continuing and indefinite work.

Firstly, there will be an assessment of the real substance, practical reality and true nature of the employment relationship.

Then, other factors must be considered. The Fair Work Ombudsman lists examples of other factors as including whether:

• The employer can offer or not offer work to the employee; and
• The employee can accept or reject work; and
• It is reasonably likely there will be future work available to the employer’s business, based on the nature of the business; and
• There are full-time or part-time employees performing the same kind of work in the employer’s business as the work the employee usually performs; and
• The employee has a regular pattern of work.

Casual conversion

Along with a new definition of ‘casual employee’, a new pathway for casual conversion will also be introduced. That is, an eligible employee changing from casual to part time.

This new pathway may be particularly relevant for employees hired as casual prior to the changes beginning on 26 August 2024, as they will remain casual employees despite the changing definition.

Notifying an intention to change to a permanent employee

If an employee is eligible, they can notify their employer of their intention to change to a permanent employee (i.e., no longer casual). This is done with a written notice.

To be an eligible employee, you must meet the following criteria:

• Been employed for at least 6 months (or 12 months if working for a small business employer); and
• Believe they no longer meet the definition of the new casual employee definition; and
• Are not currently engaged in an ongoing dispute with their employer about casual conversion; and
• In the last 6 months, have not:
  • Had their employer refuse a casual conversion notification; and/or
  • Resolved a dispute with their employer about casual conversion.

Responding to a notification

If an employer receives a notification, they must respond in writing within 21 days either accepting or refusing the change.

Before responding in writing, they must consult with the employee, including discussing details of what will change if the employee is changed to a permanent employee.

If the employer accepts the change, the response must include what the new employment status will be, the new hours of work and when the change will take effect.

If the employer rejects the change, the response must include reasons for the refusal.

What are valid reasons for refusal?

The Fair Work Ombudsman lists reasons that an employer can refuse a casual conversion as being if any of the following apply:

• The employee still meets the definition of a casual; and/or
• There are fair and reasonable operational grounds for not accepting the notification, including:
  • Substantial changes would be required to the way in which work in the employer’s business is organised; and/or
  • There would be significant impacts on the operation of the employer’s business; and/or
  • Substantial changes to the employee’s employment conditions would be reasonably necessary to ensure the employer doesn’t break any rules (such as in an award or agreement) that would apply to the employee; and/or
• Accepting the change means the employer isn’t complying with a recruitment or selection process required by law.

What if there’s a dispute?

The Fair Work Commission can hear disputes about casual conversion.

While they will generally try to resolve their alternative dispute resolution methods such as mediation or conciliation in the first instance, they will have the power to arbitrate the dispute. An arbitration can result in a legally binding decision.

Other new requirements

In addition to the new definition and pathway, employers will now be required to provide all new casual employees with a copy of the Casual Employment Information Statement (CEIS).

This is a document with information about the definition of a casual employee, when an employer has to offer casual conversion, when a casual employee can request casual conversion and other matters related to casual employment.

The CEIS must be provided to:

• New casual employees before, or as soon as possible after, the start of their employment; and
• For non-small businesses, all casual employees as soon as possible after:
  • 6 months of employment; and
  • 12 months of employment and every subsequent period of 12 months of employment; and
• For small businesses, all casual employees as soon as possible after 12 months of employment.

A copy of the CEIS can be found here.

This article is a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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• employment law