Updates To Casual Employment Laws
If you're a small to medium employer in Australia, what do you need to know about the latest changes to casual employment laws and how they might affect you?
Casual job contracts have long allowed businesses of all shapes and sizes to vary labour inputs, and to provide higher flexibility to respond to changing consumer demands. However, casual workers accounted for around two-thirds of people who lost their job in the early days of the COVID-19 pandemic in the first quarter of March 2020, with federal initiatives such as JobKeeper being incredibly complex to navigate for both small business owners and casual employees themselves.
Over the course of the past twelve months, more Australians than ever are employed on a casual basis. Many businesses are simply unable to predict their long term outlook, and have been unable to commit to a part time or full time staff member - particularly for those working in the tourism, retail and hospitality sectors. However, in March 2021, the Fair Work Ombudsman (FWO) announced changes to casual employment in Australia, and what the obligations for business owners are.
The New Changes To Casual Employment Laws
The Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Act 2021 now defines that casual employment exists when "the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person".
Critical components to the casual arrangement are set in the legislation as:
The employer can offer work and the employee can elect to reject work
The employee will work based on the employer's needs
The employment is described as casual
The employee is entitled to casual loading or a rate specific to casual employees under the terms of the employee's contract or the relevant fair work instrument.
Section 15A clarifies that a regular pattern of work is not of itself evidence of a firm advanced commitment. The relationship is to be determined at the time the employment contract is entered, not forgetting that a contract can be oral or in writing, but a written contract is easier to prove.
Once casual status is satisfied, the casual employee forgoes annual leave, personal leave, payment in lieu of notice, payment for public holidays, and redundancy but does receive a causal loading. Businesses should note that the new provisions are to act retrospectively, unless there has been a binding decision by a court.
However, the major change for business owners with the updated casual employment laws is that in some cases, casual employees have the right to become full-time or part-time employees. The number of workers a business employs influences the terms for casual conversion. Employers with more than fifteen workers can make an offer to an employee of casual employment. For casual conversion to occur, the employer has employed the worker for twelve months. The employee also needs to have worked on a steady basis for the last six months. They also agree to work the same hours as a permanent worker but without changes.
With the above terms met, employers need to offer the casual employee a permanent job.
Small businesses with less than fifteen workers have different terms for casual conversion. Changes to casual employment rules do not require them to offer permanent work. However, a worker can request a casual conversion for a full-time or part-time job.
Employees need certain terms met before a request can be accepted or denied. The employee in question needs to:
Place the request after the 27 September 2021
Needs to be employed for twelve months or more before placing a request
Work a set number of hours within the past six months
Agree to work those hours as a permanent worker without changes.
Has not been told by their employer that they cannot offer them a permanent role due
to “reasonable business grounds”Has not declined an employer’s past offers of permanent work within the last six
months.Has not been refused a past request for casual conversion in the last six months
Once the employee meets these casual conversion rules, they can then proceed to ask for full employment in writing. However, the right time also plays a part in meeting these rules. The employee should make their request no sooner than twenty-one days after their first year of service. If the small business denies the casual employee’s request, they can make another one after six months.
Once the request is placed, the small business has twenty-one days to respond. If the employer accepts the request, the employee receives new forms, including an updated pay rate to remove the casual employee loading. However, if a small business rejects the worker’s request, the employer needs to talk to them about the reasons why, and employers also need to inform casual employees of the denial in writing. Changes to casual employment mean the employer needs to show “reasonable business grounds” for the rejection.
When hiring a new casual staff member, businesses now also need to give the employee a copy of the Casual Employment Information Statement (CEIS) when hired. The statement includes information such as -
The legal meaning of a casual employee in Australia
When employers can offer casual conversion, and when they cannot
How the Fair Work Commission handles casual conversion disputes
Claims of casual conversion by a casual employee employed by a small business
While the new casual employment laws will no doubt affect thousands of businesses right around the nation, employers should review their current work arrangements with casual employees to determine if they are likely to be entitled to convert to permanency. It’s also highly recommended that businesses start reviewing their internal existing policies, procedures and contracts to ensure compliance.
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