Do you have a casual employee? Have you ever wondered what their rights are?

Here’s what you should know about changes to casual employment.

On 26 March 2021, the Federal Government passed an amended version of the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 to change some sections covering workplace rights and obligations for casual employees.

These changes are:

• A Casual Employment Information Statement;
• A definition of casual employment; and,
• Guidance on the casual conversion process.

Fortunately, there is a six-month grace period for employers to familiarise themselves with the amendments and make sure their business complies with the new laws. This grace period ends on 27 September 2021.

Casual Employment Information Statement

The first change of note is the new Casual Employment Information Statement (CEIS) produced by the Fair Work Ombudsman that all employers must provide to all new and current casual employees.

The CEIS contains pertinent information on:

• What being a casual employee means and looks like;
• A casual employees’ rights to convert their employment to permanent – that is, either full-time or part-time;
• How disputes concerning casual conversion are handled; and
• Guidance for employers on how to offer permanent employment, and how a casual employee can request to become permanent.

Along with the new CEIS, employers must provide an amended Fair Work Information Statement (FWIS) to all new employees (not just casual employees).

Definition of ‘casual employee’

The Amendment Act has inserted a definition of a casual into the Fair Work Act.

Essentially, a casual employee is defined as an employee who has accepted an offer of employment where there is “no firm advance commitment to continuing and indefinite work according to an agreed pattern of work”, and the employee has accepted the offer on that basis.

Whether there is “no firm advance commitment” at the time the offer of employment was made depends on whether:

• The employer can elect to offer work and the employee can elect to accept or reject work;
• The employee will work as required according to the needs of the employer;
• The employment is described as casual; and
• The person will be entitled to casual loading or a specific casual allowance.

Most importantly, is that whether a person is a casual employee will be based on the offer of employment and the acceptance of that offer, not on the basis of subsequent conduct of either party. This is a new development as previously, an employee may have been classified a casual employee at law despite what the employer classified them as.

Therefore, the casual employment relationship will continue until such time as:

• They become a permanent employee through the casual conversion process; or
• The employee accepts an alternative offer of employment (other than as a casual) by the employer and commences work as such.

Casual Conversion

The Amendment Act includes provisions that enable offers (from employers) and requests (from employees) for casual conversion to permanent employment.

The Amendment Act provides that after 12 months of employment, casual employees who have worked a “regular pattern of hours” in the last six months must receive a written offer of full-time or part-time employment or a notice with reasons why they have not received an offer. For businesses with 15 or more employees, they must make this offer or notice by 27 September 2021 or within 21 days after the casual employee’s 12 month anniversary, whichever is later.

However, small business employers (being employers who employ less than 15 employees) are not obligated to make offers of casual conversion under these new provisions, although their casual employees are still entitled to make a request for casual conversion. Employees who work for a small business employer will be able to request conversion after 12 months of employment, if they satisfy the same “regular pattern of hours” requirement on and from 26 March 2021.

Employers will only be able to refuse a request or not offer conversion to eligible employees if they have reasonable grounds based on facts that are known or reasonably foreseeable.

Examples of reasonable grounds to not make an offer include:

• If the employee’s position will not exist within the next 12 months;
• If the employee’s hours of work will be significantly reduced in the next 12 months; or
• If the employees days or times of work will change significantly in the next 12 months.

An employee must then provide a written response to the offer within 21 days, or the offer is taken to have been declined.

What should employers do?

It is important that you are across these changes and what it means for your business, as there are some new rights and obligations that could be costly if they are not addressed properly.

As a result of the new amendments to the law, employers should review the terms and conditions of engagement for their casual employees and identify who may be eligible for casual conversion.

If you have any questions about the new changes and legislation, please do not hesitate to contact Hillhouse Legal Partners to discuss your specific circumstances and obtain advice.