Significant changes to casual employment

As a result of the changes, the Fair Work Act will now contain a definition of ‘casual employee’. This is significant as until now there has been no clear definition of what it means to be a ‘casual employee’. Without this amendment, Courts are currently required to assess casual employment based on the principles in the decision in WorkPac Pty Ltd v Rossato [2020] FCAFC 84. These principles are based on the actual conduct of the parties, rather than the basis on which the employee was employed.

Under the new definition, a person is a casual employee if they accept a job offer from an employer knowing that there is no firm advance commitment to ongoing work with an agreed pattern of work.

Casual employees who were employed immediately before 27 March 2021 and whose initial employment offer meets the definition continue to be casual employees under the changes to the Fair Work Act.

Under the changes, an employer must offer their casual employees to convert to full-time or part-time (permanent) employment when the employee:

• has worked for their employer for 12 months;
• has worked a regular pattern of hours for at least the last 6 of those months on an ongoing basis; and
• could continue working those hours as a permanent employee without significant changes.

This is known as ‘casual conversion’. A similar provision has existed in the Modern Awards, but until now the right for an employee to request ‘casual conversion’ did not exist under the Fair Work Act. This obligation on employers in the Fair Work Act does not extend to small business employers (employers with 15 employees or less at the relevant time).

Employers can only advise casual employees they will not be making an offer of casual conversion if they have ‘reasonable grounds’ to do so. Reasonable grounds include, for example, if in the next 12 months it is reasonably foreseeable that the employee’s position won’t exist or that the employee’s hours of work will significantly reduce. Offers of casual conversion now form part of the National Employment Standards (NES), the minimum entitlements of employment in Australia. If an employer does not make an offer of casual conversion and cannot demonstrate they had reasonable grounds to do so, they may be in contravention of the NES.

The Fair Work Act now contains rules for how employers and employees need to make and respond to offers of casual conversion. Casual employees also have a right to request to convert to permanent employment if the employee:

• has been employed by the employer for at least 12 months; and
• has worked a regular pattern of hours on an ongoing basis for at least the last 6 months and could continue working these hours as a full-time or part-time employee without significant changes.

Casual employees are not able to request to convert to permanent employment if, in the last 6 months, they have refused an offer to convert to permanent employment, they have been advised in writing their employer will not be making an offer of permanent employment or their employer has refused another request for casual conversion. Casual employees can make a request for conversion every six months.

By 27 September 2021, employers (other than small business employers) need to assess whether any of their existing casual employees employed before 27 March 2021 are eligible to be offered to convert to permanent employment. Employers are required to write to casual employees making an offer to covert to permanent employment or explaining why they won’t be making an offer.

In addition, under the recent changes, a ‘Casual Employment Information Statement’ (CEIS) has been introduced. Small business employers need to give their existing casual employees a copy of the CEIS as soon as possible after 27 March 2021. All other employers need to provide a copy of the CEIS to existing employees as soon as possible after 27 September 2021.

Employers should review their current work arrangements and consider if their employees are likely to be entitled to convert to permanent employment. Employers should ensure they meet their obligations to make an offer of casual conversion to their casual employees by 27 September 2021 or advise the employees in writing why they will not be making an offer.

Employers will also need to implement processes going forward to ensure they meet their ongoing obligations as a result of the changes. In particular, employers should review the terms on which their casual employees are engaged to ensure they meet the new definition of casual employment under the Fair Work Act.

This article was co-written by Emma Sheen, Lawyer.