Casual employment changes

Is your business ready to comply with changes to casual employment laws by 27 September 2021?

In March this year, the Federal Government passed changes to the Fair Work Act 2009 relating to casual employees. These changes mean casual employees now have stronger rights to claim permanency than ever before. There is a transitional period in place for employers with 15 or more employees which ends on 27 September 2021.

Need help? Call us on 0421 085 546 for a free initial discussion about your circumstances.

New definition of casual employee

Essentially, a person is a casual employee if they accept an offer of employment from an employer which they know contains no firm advance commitment to continuing and indefinite work. For more information on the definition of ‘casual employee’ click here

A Casual Employment Information Statement (CEIS)

The Fair Work Ombudsman has developed a CEIS to be given to each casual employee to help them understand whether they have a right to casual conversion, the process and timeframes involved, and what assistance is available if they have a dispute with you about casual conversion. You can read more about the CEIS here.

A conversion pathway

There is now a clear pathway for casual employees to convert to permanent (full-time or part-time) employment. The obligations on employers relating to casual conversion, the eligibility requirements for employees, the exceptions that apply and the processes that need to be followed are covered in more detail here.

The rules that apply to small businesses (with less than 15 employees) are slightly different to the rules that apply to businesses with 15 or more employees. When determining the number of employees you have, you don’t count genuine casuals (that is, employees who work irregular hours).

Transitional Period – Employers with 15 or more employees

Importantly, there is a transitional period in place for employers with 15 or more employees which ends on 27 September 2021. You can read about the transitional arrangements in more detail here, but

Steps you need to take before 27 September 2021:

If you are an employer with 15 or more employees you need to:

  • review – review your workforce and identify your casual employees
  • assess – assess each casual employee against the modified conversion criteria at the assessment date.

Once the assessment has been completed, you must either offer conversion or refuse to offer conversion.

If an employee is eligible for conversion under the transitional rules, you must offer conversion unless you have reasonable grounds not to. Reasonable grounds include that, in the next 12 months:

  • the employee’s position won’t exist;
  • the employee’s hours of work will be significantly reduced; or
  • the days or times at which the employee will be required to work will significantly change, and that cannot be accommodated within the employee’s available days or times for work.

There may be other reasonable grounds on which you can decide not to make an offer including those specific to the workplace or the employee’s role.

You can refuse to offer conversion to an existing casual employee under certain circumstances. You must provide a notice to the employee who is not offered conversion. The notice must include the reasons why an offer is not being made. The available reasons are that:

  • the employee has not met the eligibility criteria to be made an offer (eg because they have not been employed for at least 12 months from the date of the assessment) or
  • the employee does not satisfy the regular pattern of hours requirement or
  • you have reasonable grounds for not making an offer.

After 27 September 2021, it is mandatory to offer all eligible casual employees permanent employment on the 12 month anniversary of the commencement of their employment with you.

After completion of the transition period (by 27 September 2021) you must then give each existing casual employee identified during the transition period a copy of the CEIS. This ensures existing casual employees are notified about the new legislative definition of ‘casual employee’ and the casual conversion rights and obligations under the law changes.

Small business employers (less than 15 employees)

Obligations for small business employers started on 27 March 2021. You need to determine which existing employees were employed by you as casual employees as at 27 March 2021. You then need to give the CEIS to each of those casual employees as soon as practicable after that date.  If you have not already done this, we suggest you aim to give the CEIS to each of those casual employees by 27 September 2021.  

Casual employees who work for small businesses, and who meet the criteria for conversion, have a right to request permanency. You do not need to make a formal offer of permanency to these employees (unlike employers with 15 or more employees).

The risk you need to be aware of: poor employment contracts or no employment contracts

We have seen examples of poorly written employment contracts, that are not clear on the casual employment relationship. There are examples of employees successfully claiming permanent entitlements (such as annual leave and public holidays), because of poorly worded employment contracts. They have received back payments for annual leave and public holidays, on top of what the employer believed was a casual loading to cover the non-payment of these entitlements.

Similarly, if there is no casual employment contract in place, an employee may be able to claim they were employed on a permanent basis, and claim back payments for entitlements (such as annual leave and public holidays).

Employment contracts will play an important role going forward in clarifying the casual employment status of employees, and protection against claims for back pay.

Need help? Call us on 0421 085 546 for a free initial discussion about your circumstances.