New rules for casual employees

On 25 March 2021, the Fair Work Act 2009 (Cth) was amended to include new rights and obligations for casual employees.

These changes came into effect the next day.

The reforms are the only part of the Federal Government’s original IR Omnibus Reform Bill that made it through both houses of Parliament.

The Fair Work Act (“FW Act“) has been amended to include:

• a definition of casual employment (previously there was none);
• specific requirements for converting to permanent employment; and
• a requirement that employers issue a Casual Information Statement.

Employers should review their arrangements to ensure they are compliant.

Otherwise, they may be liable for additional, unexpected employment entitlements.

Definition of casual employment

A casual employee is one who accepts an offer of employment on the basis that the employer makes ‘no firm advance commitment to continuing and indefinite work according to an agreed pattern of work’.

Relevant factors include:

• whether the employer can choose to offer work, and the employee can choose to accept or reject it; and
• payment of a casual loading or casual rate of pay.

The nature of the employment is to be assessed at the time of the offer, and not by reference to the subsequent conduct of the parties (eg working the same work pattern every week).

Conversion to permanent employment

The FW Act makes provision for conversion to full-time or part-time employment where the employee:

• has been employed for at least 12 months; and
• has worked a regular pattern of hours for the last 6 months, which they could continue to work without significant adjustment.

Employers (other than small business employers) are required to make an offer, unless there are reasonable grounds not to do so (eg work will reduce, the position will cease to exist).

Where an offer is not made, the employer must provide a written explanation. Employees also have the right to request casual employment in certain circumstances.

There is a six-month transition period to enable employers to offer permanent employment to eligible casual employees.

The FW Act also enables disputes about conversion to be dealt with by the Federal Circuit Court.

Offsetting provisions

In the event that a person claims that they were incorrectly characterised as a casual employee, and makes a claim for entitlements as a permanent employee, the amendments require a Court to reduce any amount payable by the loading amount (or the portion of it that is attributable to the relevant entitlements).

Reviewing arrangements

Broadly speaking, the amendments apply retrospectively, so employers should consider whether they need to make changes to their current arrangements.

For example, employers may need to:

• apply to the Fair Work Commission for a determination dealing with current enterprise agreements;
• update their employment contracts;
• offer permanent employment to some casual employees; and
• issue the Casual Information Statement to new and existing casual employees.

We recommend you seek advice about your particular circumstances where:

• you employ or are considering employing casual employees;
• you could be exempt as a small business owner; or
• your casual employees have been employed for 12 months or more and have worked regular pattern of hours for the last 6 months.

We can provide a documentation package to help you manage ongoing casual employment within your organisation.

About our Employment group

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With in-depth experience covering the full range of workplace-related issues, Thynne + Macartney advises employers across a broad range of industries and provides expert representation in disputes.

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