Defining Casual Employment
Closing loopholes No. 2 will introduce a new definition at s 15A(1) of the Fair Work Act 2009 (Cth) (FWA) of casual employment. The new definition has two elements:
- The employment relationship is characterised by no firm advanced commitment to continuing and indefinite work.
- The employee is entitled to a casual loading, or specific casual rate of pay, under a fair work instrument or contract.
This definition differs from the current section 15A which gives primacy to the terms used in the employees offer of employment following the decision in WorkPac v Rossato [2021] HCA 23. Parties will now need to consider the practical reality of the employment relationship and not just what the employment contract says or was agreed at the time employment began.
A range of factors will need to be considered when determining whether an employee has a firm advance commitment to continuing and indefinite work. Some factors to consider include:
- whether the employer can choose to offer or not offer work, and whether the employee can choose to accept or reject an offer of work;
- whether continuing work is reasonably likely to be available given the nature of the business;
- whether part-time or full-time employees are undertaking similar roles in the same workplace; and
- whether there is a regular pattern of work for the employee.
The amendments expressly acknowledge that the existence of a regular pattern of work is not a commitment to continuing and indefinite work. There is no single consideration that is determinative of whether an employee is a casual. A firm advance commitment can be in the form of a contract, mutual expectation or understanding or a combination of these. In fact, an employee with a regular pattern of work may still be a casual employee. Employees will remain as casual until the indicia indicate otherwise and they exercise their choice to change their status if they meet the criteria to do so.
There are some exceptions to the new definition which include fixed-term contracts and some academic employees.
Casual Conversion Changes
From 26 August 2024, there will no longer be a requirement for employers to offer casual conversion. Rather, under the new section 66AAB, employees who have been employed for at least 6 months (with employers with more than 15 employees) or for at least 12 months with a small business (with fewer than 15 employees) will have a new pathway in which to convert from casual to permanent employment.
Under the new provisions, employees will have the choice to give an employer written notice that they no longer believe the employment relationship is a casual arrangement if:
- They believe they no longer meet the requirements to be classified as casual; and
- There is no ongoing dispute with their employer over their employment status; and
- They meet the minimum service requirements; and
- In the previous 6 months there has not been any resolution of an employment status dispute or a response from the employer rejecting a previous notification from the employee about their employment status.
Employers Response Process for Employee Choice
Employers must respond to employee notifications in writing within 21 days (s 66AAC) to indicate whether the notification is accepted or rejected. However, before responding in writing, employers must have consulted with the employee (s 66AAC(3)).
Accepting a Notification
When accepting a notification in writing, employers must include whether the employment will be part or full time as well as any changes to working hours and confirm the date the change will take effect (s 66AAC(2)).
Rejecting a Notification
Employers may reject a notification if:
- The employee still meets the definition of a casual employee; or
- The employer has fair and reasonable operational grounds such as:
- Substantial changes to the organisation would be required if the notification was accepted;
- There would be significant impact on the operation of the business;
- The employees’ terms and conditions of employment would need to be changed substantially to avoid a breach of a Fair Work instrument; and
- Accepting the notification would result in result in the employer failing to follow a legally required recruitment process.
Resolving Disputes
Disputes are dealt with under the new section 66M. Parties must first try to resolve disputes at the workplace level before any referral to the Fair Work Commission (FWC) is made. The FWC will be able to help resolve disputes and use arbitration as a last resort.
Small claims
Casual employees will still be able to commence a small claim dispute about whether they were a casual when their employment commenced (s 548(1C)(b)).
Casual Employment Information Statement
The Casual Employment Information Statement will be updated and employers are required to provide the statement to casual employees before or as soon as practicable after they commence employment (s 125B(1)(a)). Employers will also be required to provide the statement to casual employees after 12 months of employment for small businesses with fewer than 15 employees and after 6 months and 12 months after commencement and every 12 months thereafter for other employers.
New Anti-Avoidance Provisions
New anti-avoidance provisions will be introduced under s 359B, with a breach of the provision attracting a maximum penalty of 300 penalty units.
Under the new provisions employers must not:
- Terminate or threaten to terminate an employee in order to engage them as a casual employee to do the same or substantially the same work; or
- Make knowingly false statements to influence an employee to enter into a casual contract to perform the same or substantially similar work (s 359C).
For help understanding how the new casual work provisions apply to your workforce contact our Employment Law team today.
Disclaimer: This is intended as general information only and not to be construed as legal advice. The above information is subject to change. You should seek independent legal advice before embarking upon any course of action.
