01 Apr HR Law Alert – Changes to Casual Employment

Many employers across Australia employ casual employees.  Many employers however are not aware of, or across the details of the industrial changes that passed through Federal Parliament on 26 March 2021.

The Fair Work Act 2009 (“Act”) was amended by the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021, to include significant changes to the workplace rights of casual employees.

Importantly these changes are already in play.  These changes took effect on Saturday 27 March 2021. 

Below HR Law sets out what you need to know.

Casual employment – what has changed?

There are three big takeaways from the amendments to the Act. They are:

1. There is now a definition of what is “casual employment” under the Act.

2. Casual employees have rights to convert to permanent employment.

3. Employers will need to give casual employees a Casual Employment Information Statement which is available on the Fair Work Ombudsman’s website. 

What does this mean?

There is a lot in the amendments to the Act that employers need to be across, and very quickly.  A brief summary is below.

What is a casual employee?

A casual employee is now defined under the Act.  An individual will be a casual employee under the act where:

• They are offered a job;
• The offer does not include a firm advance commitment that the work will continue indefinitely with an agreed pattern of work; and
• They accept the offer on that basis. 

The amendments to the Act also provide guidance on what is a “firm advance commitment” and that the question of whether a person is a casual employee is assessed on the basis of the offer of employment made and the acceptance of that offer, not on the basis of any subsequent conduct of either party.

What are the casual conversion rights?

Many modern awards have casual conversion options, which give employees the right to request conversion to either full-time or part-time employment.  The Act now includes under the National Employment Standards (“NES”) a right to casual conversion.  The new provisions in the Act place a much more onerous burden on employers than the modern awards do.  The Act now requires that employers must offer a casual employee to convert to full-time or part-time employment where the employee:

• has worked for their employer for 12 months
• has worked a regular pattern of hours for at least the last six of those months on an ongoing basis
• could continue working those hours as a permanent employee without significant changes.

There are also strict compliance requirements under the Act in respect of making offers and responding to offers that employers will need to be able to demonstrate they meet.  

Where there are “reasonable grounds” as defined by the Act not to make an offer of conversion to a casual employee, the Act requires the employer to communicate this to the impacted employee in writing.  Small businesses as defined by the Act are also exempt from the requirement to offer conversion to permanent employment, however casual employees of a small business employer are still entitled under the Act to make a request for conversion to permanent employment which must be responded to in accordance with the requirements of the Act.

What is a CEIS?

The amendments to the Act required the Fair Work Ombudsman to create a Casual Employment Information Statement, also known as a CEIS, to be given to a casual employee on commencement of employment.

For casual employees who start employment after 27 March 2021, they need to be given a copy of the CEIS by their employer before, or as soon as possible after, they start employment.

There is also a requirement for employers to ensure their existing casual workforce receives a copy of the CEIS.  Small businesses are required to give the CEIS to existing casual employees as soon as possible.  All other employers are required to give existing casual employees the CEIS as soon as possible after the end of the transition period that ends on 27 September 2021.

What is next – as a business owner what do you need to do?

Make no mistake, the onus under the Act is on employers to be aware of their obligations to their casual employees and make sure they are meeting these obligations. Employers should be proactive about understanding their obligations under the Act and making sure their practices align with the changes in legislation.

Some key things employers should be doing now include:

1. Issuing the CEIS to all new casual employees; and

2. Checking your casual contracts to ensure the offer of employment made aligns with the definition of a casual employee under the Act; and

3. Ensuring you have appropriate systems in place that set your business up for compliance under the Act, specifically around offering conversion to permanent employment.

The team at HR Law remain committed to assisting employers navigate these difficult times and the changes and developments in the law.  If you have any questions or need assistance please contact us on 3211 3350.

We will also be hosting a complementary webinar dedicated to the changes to casual employment under the Act, focusing on giving you practical tips around the casual conversion rights under the Act.   Details of the webinar will be circulated next week.