Important amendments have been made to the Fair Work Act 2009 (Cth) (the Act) which introduce new workplace rights and obligations with respect to casual employees. These changes came into effect as of 27 March 2021, following the enactment of the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020.
Meaning of ‘casual employee’
Following these changes, the Act now defines a ‘casual employee’ as someone who accepts an offer of employment from an employer 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 (the ‘Firm Advance Commitment’). The Act sets out various factors which must be exclusively considered in determining whether the employer makes a Firm Advance Commitment. It also states that a regular pattern of hours does not of itself indicate a Firm Advance Commitment.
Importantly, the question of whether a person is a casual employee is assessed based on the offer and acceptance of the offer of employment, and not on the basis of any subsequent conduct of either party. Also, a casual employee will remain casual until they are converted to permanent employment, or the employee accepts non-casual employment by the employer and commences work on this basis.
Offers for casual conversion
Employers (other than small business employers) are required to make written offers to casual employees for them to convert to permanent employment if:
- the employee has been employed for 12 months; and
- during at least the last 6 months of that period, the employee has worked a regular pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to work as a full-time employee or a part-time employee (as the case may be).
Employees who have worked the equivalent of full-time hours during that previous six month period must be offered full-time employment, whilst those who have worked less than full-time hours must be offered part-time employment that is consistent with the regular pattern of hours worked.
The Act states that an employer is not required to make such an offer if there are reasonable grounds not do so, which are based on facts that are known, or reasonably foreseeable at the time of deciding not to make the offer. Examples of such reasonable grounds are set out in the Act.
Various requirements apply to the notification of such offers (and non-offers), and the acceptance of such offers.
The Act also creates a right for casual employees to request conversion in certain circumstances, and employers are only able to refuse such requests on reasonable business grounds, and following consultation with the employee.
Employers should also ensure compliance with any awards or industrial agreements that provide for a more generous casual conversion entitlement.
Casual Employment Information Sheet
Employers will be required to provide all casual employees with a Casual Employment Information Sheet. This must be provided before, or as soon as possible after the employee starts their job.
Casual loading offset
Where an employee makes a claim for entitlements during a period of employment in which they were not a casual employee, the Act allows a court to ‘set off’ any identifiable casual loading that was paid to that person during the relevant period. This prevents an employee from ‘double dipping’ with respect to such payments. The claim for entitlements can include claims for annual leave, personal leave, compassionate leave, public holiday pay, payments in lieu of notice or redundancy pay.
The Act also creates a pathway for parties to resolve disputes about the operation of these provisions. If a dispute cannot be resolved at the workplace level, it can be referred to the fair Work Commission.
Next steps for employers
As a result of these new laws, employers should take steps to:
- Review the terms and conditions on which you engage casual employees, including the manner of engagement. In particular, it will be important to ensure that contracts of employment for casual employees clarify the basis of the employment, and clearly establish the loading component of a casual employee’s hourly rate of pay.
- Consider any obligations you have to offer casual employees conversion to full-time or part-time employment.
- Ensure that casual employees are provided with the Casual Employment Information Sheet.
The information in this article is for information purposes only and does not constitute legal advice. You should obtain specific advice relevant to your circumstances.
 I.e. employers with a headcount of less than 15 employees