On 22 March 2021, the federal government passed changes to the Fair Work Act 2009, known as the Omnibus Bill. There is now a statutory definition of Casual Employment:
“A person is a casual employee where an offer of employment is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for that person.”
To determine whether an offer of employment falls within the definition of Casual Employment, the following must be considered:
- Whether the employer can elect to offer work and whether the employee can elect to accept or reject work
- Whether the employee will work only as required
- Whether the employment is described as Casual Employment; and
- Whether the employee will be entitled to a casual loading or a specific rate of pay under the terms of the offer or the applicable industrial instrument.
I Am An Employer – What Does Casual Conversion Mean For Me?
All employers, except for small businesses, may be required to offer their casual employee to take up permanent employment (part-time or full-time) if the following criteria are met:
- Your casual employee has worked for you for at least 12 months; and
- In the last 6 months of the 12 months period of employment, your casual employee worked a regular pattern of hours on an ongoing basis; and
- Your casual employee could continue to work as a permanent employee (part-time or full-time) without a significant change to their hours of work.
- You must offer conversion within 21 days after the end of the first 12 months of employment.
In certain circumstances, you may not be required to make an offer of conversion where it is not reasonable.
- There will be no ongoing employment in the position in the next 12 month period as a result of known business changes
- The hours/days of work your casual employee would be required to work would be reduced significantly/changed
- Your casual employee is filling in for an employee on leave
- The role is genuinely a project role.
I Am An Employee – What Does Casual Conversion Mean For Me?
As a casual employee, you have the right to request your employment be converted to permanent employment (part-time or full-time) where you have worked for a minimum of 12 months and in the last 6 months had a regular pattern of hours.
You are not entitled to make a conversion request if you declined, on reasonable grounds, an offer of conversion from your employer in the past 6 months.
Where you make a request for conversion, your employer must not refuse such a request unless they have determined that there are reasonable grounds for refusal.
No “Double Dipping”
The recent amendments seek to prevent “double-dipping” where employees have been paid a casual loading but were found to also have an entitlement to paid leave such as in the Federal Court Decision (the Rossato decision), by “offsetting” entitlements.
If a casual employee makes a claim to entitlements such as paid leave, payment for public holidays, payment in lieu of notice or redundancy pay, the employer is entitled to rely on the payment of the casual loading that was specified in the offer of employment to “offset” these claims.
To be able to make an “offsetting” argument, the employer should ensure that the casual loading is able to be identified as an amount paid to the casual employee.
Casual Employment Information Statement
All employers engaging casual employees must provide the employee with the Casual Employment Information Statement prior to the commencement of employment or as soon as practicable after commencement.
Possible Impact On Employers
The changes to legislation give employers certainty in relation to the entitlements of their casual employees. To avoid claims, you must ensure that your offers of employment and contracts of employment comply with the new requirements of the legislation.
For further information or if you would like our assistance with reviewing how you employ casual employees, please contact our expert Employment Law and Industrial Relations team on 07 5539 9688 or fill out our contact form.