For those businesses wanting, or requiring, casual employees as a part of their workforce, more changes have been made as a part of the Closing the Loopholes no. 2  legislation that has now passed through Federal Parliament.  The changes impacting how we look at ‘casual employment’ take effect on 26 August 2024 so let’s look at what is happening and what you will need to do to be ready.

What’s changing?

The changes include:

1. A new definition of ‘casual employee’
2. A new pathway for casual conversion
3. New protections

Definition of a casual employee

An employee will be deemed casual if:

• The employment relationship lacks a firm advance commitment to ongoing and indefinite work.
• The employee is entitled to a casual loading or specific rate under a fair work instrument or employment contract.

Consideration will be given to the ‘real substance, practical reality and true nature’ of the employment relationship.  Some of the factors that will form any part of the considerations will include:

• The employer can choose to offer the employee work.
• The employee can choose to accept or reject an offer of work.
• The employee has a regular pattern of work.
• There are full-time or part-time employees within the business delivering the same work.
• It is reasonably likely that there will be future work available.

What this essentially means is that when determining whether an employee meets the definition of “casual” employee or not, a contract will no longer  be the primary source of information. There will now be multiple factors considered including how things are really playing out on a week to week basis that will be the main drivers and it will be the likely that a regular pattern of work would be a significant factor in determining whether employment was permanent or casual.  A well crafted and legal employment contract should still be provided to your employees as best practice with specific clauses explicit to casual employment status.

The new pathway for casual conversion

Currently, employers are legally required to offer all casual employees the opportunity to convert to permanent employee after 12 months of regular and systematic employment.  The change moves the onus for initiating a casual conversion request from the employer to the employee and the employee will be required to: Notify their employer in writing that their employment no longer satisfies the definition of casual employment (after 6 months employment in a medium/large business and 12 months employment in a small business of less than 15 employees) and request to convert from casual employment to either permanent part time or permanent full time employment

• The employer must genuinely consult with the employee to discuss their request and then provide a written response to the employee within 21 days.  The employer can either:
  • Accept the notification – the employee will then shift to permanent full time or part time employment.
  • Refuse the request based on one or more of the following reasons:
    • The employee still meets the definition of a casual employee.
    • There are ‘fair and reasonable operational grounds’ for refusal. (E.g. Significant changes to the work or the business would be required to accommodate the change
    • Acceptance of the change would contravene a recruitment of selection process required by law.

Employees cannot submit a notification to change to permanent employment if:

• They are already involved in a dispute with their employer regarding casual conversion, or
• In the last 6 months:   
  • They had a notification refused by an employer.
  • A dispute with an employer about casual conversion was resolved.

The new protections for casual employees

Employers must also be aware that they must not:

• Dismiss or threaten to dismiss a permanent employee with the plan to re-engage them as casual.
• Make any false claims regarding casual employment (e.g.  telling someone they would be better off financially if they choose casual).

Casual Employee Information Statement

Currently, the Casual Employee Information Statement must be provided to a new casual employee when they commence working with you.  This obligation has increased, and employers will now be required to provide the CEIS again once the employee has been with your business for six (6) months (twelve (12) months for small business) and every twelve (12) months thereafter.  Make sure you diarise this obligation so it isn’t overlooked.

What you need to do

If you do employee casual workers, you will need to review their patterns of work and make sure they meet the new definition.  Be across the new pathway to casual conversion and be aware of the twenty-one (21) day response time should you receive a notification from an employee.  You will also need to comply with award requirements when it comes to remuneration and casual loadings.

The changes also bring with them the potential for hefty civil penalties so if you are unsure of what changes you need to make or how to communicate with employees, please contact the HR Staff n’ Stuff team to discuss. Be on the look out for next week's blog where we will take you through regular and systematic patterns of work and what it all means for you and your casual employees.