From 27 March 2021, a number of amendments to the Fair Work Act 2009 (the FWA) came into effect regarding the workplace entitlements and obligations of casual employees.
The changes had a transitional period for implementation which will come to an end on 27 September 2021.
These changes included a new definition of a casual employee in the FWA.
The new section 15A of the FWA provides that a person is a casual employee of an employer if:
(a) an offer of employment is made on the basis of no firm advance commitment; and
(b) the person accepts the offer on that basis; and
(c) the person is an employee as a result of that acceptance.
In determining whether there is no such firm advance commitment, only the following criteria can be considered:
(a) whether the employer can elect to offer work and whether the person can elect to accept or reject work
(b) whether the person will work only as required
(c) whether the employment is described as casual employment and
(d) whether the person will be entitled to a casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument
Significantly, the question of whether a person is a casual employee is assessed at the time of the offer of employment, not on any subsequent conduct of either party.
Further, once employed as a casual, an employee will continue to be classified as a casual employee until:
- they become a permanent employee through casual conversion;
- they become a permanent employee by accepting full-time or part-time employment; or
- they stop being employed by the employer.
The changes to the FWA, also create a provision in the National Employment Standards (NES) which enables casual employees to become full-time or part-time (permanent), in certain circumstances. This changes from casual to permanent employment, is referred to as “casual conversion”.
Casuals who were employed immediately before 27 March 2021 and whose initial employment offer meets the new definition, continue to be classified as casual employees under the FWA. Casual employees can become permanent by their employer offering “casual conversion”, or by the employee making a request to their employer for “casual conversion”.
Employers must now offer a casual employee conversion to full or part time employment if they satisfy the following criteria:
- they have worked for the employer for a 12 month period;
- they have worked a regular pattern of work on an ongoing basis for at least the past 6 months; and
- the employee could continue to work their regular hours as a permanent employee without significant adjustment.
The new laws provide exceptions for small business employers or employers who can point to “reasonable grounds” that exist not to make an offer of casual conversion.
In circumstances where an employee is described as a casual, but through court proceedings it’s determined that they are in fact not, a court needs to reduce any amounts that the employee could be entitled to by, reference to casual loading amounts already paid by the employer. In effect the employer has the ability to offset casual loadings against other entitlements that may be payable such as annual leave entitlements.
From these changes employers are also now required to give every new casual employee a “Casual Employment Information Statement” (the CEIS) before, or as soon as possible after, they start work.
For small business employers, they are required to give their existing casual employees a copy of the CEIS as soon as possible after 27 March 2021. Whereas for large employers, with more than 15 employees, they are required to give their existing casual employees a copy of the CEIS, as soon as possible after 27 September 2021.
The Fair Work Commission is currently reviewing the relevant terms in modern awards on the basis of their interaction with the new casual employee definition and casual conversion arrangements. It is due to complete this review by 27 September 2021. Where the review finds an inconsistency, difficulty or uncertainty, the Commission must vary the modern award as soon as possible.
Employers need to ensure that they are complying with the casual reforms by:
- Issuing the Casual Employment Information Statement to all new casual employees;
- Checking casual contract of employment to ensure the offer of employment made aligns with the definition of a casual employee under the Fair Work Act;
- Reviewing all existing casual arrangements to determine eligibility for casual conversion; and
- Ensuring an employee’s casual loading is expressly stated and easily identifiable, so it can be offset against any future claims.