There have been a number of reforms to casual employment over recent years, including how casual employment is defined, the processes around converting to permanent employment, and the ability of casual employees to claim permanent employment entitlements.
From 26 August 2024, there are further changes to casual employment that employers will need to fully understand and comply with. In this article, we summarise the main changes.
Definition of casual employment
From 26 August 2024, a range of factors will determine whether an employee is a casual.
Previously, the Fair Work Act defined a casual employee as someone who accepted a role with the understanding that there was no firm advance commitment to ongoing work with an agreed pattern of work.
This definition placed the emphasis on the terms as agreed in a written employment contract when the employee started work, meaning that the contract was the key determinant as to whether or not an employee is a casual, rather than the day-to-day reality of the work.
Now, an employee is only a casual if:
- The employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work; and
- The employee would be entitled to a casual loading or a specific rate of pay for casual employees (under a modern award, registered agreement, or employment contract).
A range of factors determine whether there is an absence of a firm advance commitment, including the practical reality and true nature of the employment relationship, and the terms of an employment contract or mutual understanding (or expectation) between the employee and employer.
This new definition of closes a loophole that leaves employees stuck with a casual status even when they work regular hours.
Employees classified as casual who were with their employer before 26 August 2024 will stay casual under the new definition unless they move to permanent employment.
Casual conversion
From 26 August 2024, employers are no longer required to assess and offer eligible casual employees conversion to permanent employment. Instead, the conversion process is led by the employee.
Under the National Employment Standards (NES), casual employees who believe they no longer meet the new definition of a casual employee (see above) have the workplace right to request - in writing - a shift to permanent employment after a period of 6 months, or 12 months if they work for a business with fewer than 15 employees.
Employers have to consult with the employee requesting conversion and to respond to written notifications from casual employees within 21 days.
If the employer accepts, they must engage the casual worker on a permanent full- or part-time basis.
Employers can refuse if:
- The employee meets the definition of a casual employee.
- There are ‘fair and reasonable operational grounds’ for not accepting the request (these grounds are broader than the previous ‘reasonable grounds’), e.g. if substantial changes would be required to the way in which work in the enterprise is organised or it would bring significant impacts to the operation of the enterprise.
- Accepting the request would mean the employer does not comply with recruitment or selection processes required by Commonwealth, State or Territory laws.
If employers deny a request, they aren’t required to provide detailed reasons, however workers will be able to appeal a decision with the Fair Work Commission, who have new powers to resolve disputes.
Casual employees employed before 26 August 2024 are entitled to access conversion to permanent employment via the previous pathways, i.e:
- Enterprises with 15 or more employees - a casual who has been employed for 12 months and worked a ‘regular pattern’ of hours for the past 6 months can be offered permanent employment by their employer.
- Enterprises with fewer than 15 employees - casual employees who have been employed for 12 months and worked a ‘regular pattern’ of hours for the past 6 months can request conversion to permanent employment.
These pathways continue to apply for 6 months (12 months if employed by a small business) from 26 August 2024.
There are additional rules around notifying employees and responding to these offers and requests. Find out more in our guide to casual conversion under the NES.
Casual Employment Information Statement
From 26 August, employers must provide the Casual Employment Information Statement (CEIS) to casual employees at these intervals in the employment relationship:
- Before or as soon as possible after they have started employment,
- After 6 months,
- After 12 months, and
- Every 12 months of employment.
Small business employers (with fewer than 15 employees) only need to provide it to new casual employees and then after 12 months.
Previously, employers were required to issue new casual employees with the CEIS but weren't required to give it to casual employees more than once in any 12 month period (e.g, if an employer employs a casual employee temporarily at different stages in a 12-month period, they only need to give them the CEIS once).
From 26 August, the CEIS now has information about:
- The definition of a casual employee.
- How casual employment can be changed, including when an employee can notify their employer of their intention to change to permanent employment.
- The reasons why an employer may not accept an employee’s notice.
- The role of the Fair Work Commission to deal with disputes.
Employers are required to provide casual employees with the version of the CEIS that is in place at the time they have to issue it, and should ensure that they maintain records that it has been provided.
Anti-avoidance provisions
From 26 August 2024, new provisions in the Fair Work Act make it illegal for employers to make or persuade an employee to switch to, or enter into, a contract for casual employment to perform the same, or substantially the same, work.
This includes dismissing, or threatening to dismiss, a full-time or part-time employee in order to re-employ them as a casual.
It also includes making false statements to persuade a person to enter into casual employment, e.g. saying they will be financially better off, or misrepresenting employment as casual.
Courts can now impose penalties against individuals or businesses for contraventions, up to a maximum (per contravention) of $93,900 for individuals or $469,500 for businesses.
Our advice
We recommend that employers that engage casual employees review their employment contracts to ensure that they clearly define the employment relationship as casual in nature, as per the new definition.
As well, ensure that the employee’s payslip separately identifies the casual loading as a demonstration of casual employment.
You should also be aware that casuals can request conversion to permanent employment, and you must consult with the employee and respond to their request.
