Changes to casual employment

What’s changed

The Fair Work Act 2009 has been changed to give employers and employees more certainty about casual employment.

The changes give eligible casual employees a pathway to permanent employment if they want it. They also define what ‘casual employee’ means. This ensures employers and employees are certain about their rights and obligations.

There are 5 key changes:

  1. A clear, legal definition of a casual employee.
  2. A right to convert from casual to permanent employment.
  3. A new Casual Employment Information Statement.
  4. A simpler legal process for casual conversion disputes.
  5. A new rule about offsetting casual loading in court disputes about entitlements.

The changes apply from 27 March 2021.

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Clear, legal definition of a casual employee

A legal definition of a casual employee gives employers more certainty that they are engaging a person as a casual employee when they make an offer of employment. It also gives employees clarity about their status as a casual employee.

A casual employee is someone who accepts an offer for a job knowing that there is no firm advance commitment to ongoing work with an agreed pattern of work.

Only these factors are relevant to determine if an employer made an offer of casual employment:

  1. Whether the employer can choose to offer the employee hours of work and the employee can accept or reject work when it’s offered.
  2. Whether the employee works as they are needed by the business.
  3. Whether the employment is described as casual.
  4. Whether the employee is entitled to a casual loading or a specific rate of pay for casual employees.
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Pathway from casual to permanent employment

Casual employees can now access a pathway to a permanent role if they are eligible and want to.

This is called casual conversion. It is now one of 11 minimum employment standards in the National Employment Standards that must be provided to all employees.

Employers offering casual conversion

Employers that are not small businesses must assess all casual employees when they have been employed for 12 months. They must either offer to convert the employee to permanent employment or give written reasons why not.

A casual employee is eligible to receive an offer if they:

  • have been employed by their employer for 12 months
  • have worked a regular pattern of hours on an ongoing basis for at least the last 6 months
  • could work these hours as a full-time or part-time employee without significant changes.

The casual employee can either accept the offer or decide to remain a casual.

Right to request conversion

Casual employees of small businesses can ask to convert to a permanent role if they are eligible.

This right is also available to all eligible casuals who refused an offer of conversion from their employer before, or were not made an offer.

To be eligible to request casual conversion, a casual employee:

  • must have been employed by the employer for at least 12 months
  • needs to have worked a regular pattern of hours on an ongoing basis for at least the last 6 months
  • could work these hours as a full-time or part-time employee without significant changes
  • must not have refused an offer to convert in the previous 6 months.

Casual employees who believe they are eligible to become a permanent employee can request conversion every 6 months.

Why a business may refuse a request or not make an offer

Employers do not need to offer a casual employee a permanent role or accept their request for a permanent role if they have reasonable grounds not to. These reasons must be based on facts that the employer knows or can reasonably foresee. Employers must write to the employee and give these reasons.

Reasonable grounds can include that in the next 12 months the employee’s:

  • position won’t exist
  • hours of work will significantly reduce
  • days or times of work will significantly change which they can't accommodate within their available days or times for work.

Reasonable grounds are not limited to these and others may apply particular to the employer circumstances.

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New Casual Employment Information Statement

Employers need to give all casuals a Casual Employment Information Statement before, or as soon as practicable after, the employee starts employment as a casual. They must also still give them a copy of the Fair Work Information Statement.

This statement helps casual employees understand their rights and entitlements.

Simpler legal process for casual conversion court disputes

Where an employer decides not to offer a permanent role, or decides not to accept a request for conversion to a permanent role, and a casual employee disagrees with the decision, there are steps they can take.

If the employer and employee are covered by an enterprise agreement, award, contract of employment, or other written agreement that includes a dispute resolution process that can deal with the dispute, they should follow that process to resolve a dispute about casual conversion.

Where a dispute resolution process does not exist, the first step the employee should take is to discuss the decision to not offer, or to refuse the request for, permanent employment with their employer. If this does not resolve the issue, the employer or employee can contact the Fair Work Commission.

An employee may also seek to have their concern resolved by a court. For certain types of disputes about casual conversion, they can access a small claims process within the Federal Circuit Court. This means the concern can be heard and resolved faster and cheaper than going through other court channels.

New rule about offsetting casual loading in court disputes

An employee can apply to a court to make a decision about their employment status, if their employment is described as casual but they believe it is not.

If a court determines they are not a casual, the employer could be asked to pay any leave entitlements the employee did not receive.

Before, it was not clear whether casual loading payments the employer had already paid could be ‘offset’ against any amount owed to an employee.

Now, the courts must recognise identifiable casual loading payments and deduct them from any amount owed to the employee.