Changes for casual employment – employer’s responsibilites

Changes affecting employers of casual employees came into effect on 27 March 2021 following the Fair Work Amendment (Supporting Australia’s Jobs and Economy Recovery Act 2021 (Cth) (Amendment).  The apparent intention of the Amendment is to strengthen the position of regular casual employees and establish more onerous obligations for employers.  Employers need to be aware of these changes to ensure they are not in breach of their new obligations.

How are employers of casuals affected?

The major changes for casual employees include:

• an amended definition of casual employment;
• a casual conversion opportunity, which is a new pathway for casuals to pursue a change of employment to either part-time of full time; and
• the introduction of a requirement to provide a Casual Employment Information Statement (CEIS).

New definition of ‘casual employment’

The Amendment has added section 15A to the Fair Work Act 2009 (Cth)(Act) which provides:

“15A Meaning of casual employee

(1) A person is a casual employee of an employer if:

(a) An offer of employment made by the employer to the person 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 the person; and
(b) The person accepts the offer on that basis; and
(c) The person is an employee as a result of that acceptance.“

From the employer’s perspective, the most important aspect of this is ‘no firm advance commitment’.  Where it can be seen that a firm advance commitment exists, the employee will not be considered casual.  This is an important distinction.

Section 15(2) of the Act provides some guidance in determining what constitutes a ‘firm advance commitment’.  The following considerations assist in determining whether a ‘firm advance commitment’ exists:

• whether the employer can elect to offer work and whether the person can elect to accept or reject work;
• whether the person will work as required according to the needs of the employer;
• whether the employment is described as casual employment; and
• whether the person will be entitled to a casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument.

The Act, in attempting to provide clarity in relation to these new considerations, provides further that:

• a regular pattern of hours does not, on its own, indicate a firm advance commitment;^[1] and
• whether a person is a casual employee is to be assessed on the basis of the offer of employment and the acceptance of that offer, not on the basis of subsequent conduct of the parties.^[2]

A casual employee will remain so until they undergo a casual conversion (described below) or accept an alternative offer of employment.^[3]

What is a casual conversion?

Section 66B of the Act provides that an employer must, subject to some exceptions, make an offer to convert casual employees to either part-time or full-time employment, depending on their hours worked. Such an offer will be required in circumstances where:

• the employee has been employed by the employer for a period of 12 months beginning the day the employment started; and
• during at least the last 6 months of that period, the employee has worked a regular pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to work as a full-time or part-time employee, as the case may be.

Importantly, the offer must:

• be in writing;
• offer full-time or part-time employment; and
• be provided to the employee within 21 days of the employee having worked for 12 months.

On acceptance of a casual conversion offer by the employee, the employer must, within 21 days, give written notice to the employee outlining the practical effect of the conversion.^[4]  This notice confirms the employee’s conversion from casual to either part-time or full-time employment.^[5]

Exceptions to the requirement to offer casual conversion

An offer for casual conversion will not be required in circumstances where there are reasonable grounds not to make the offer.^[6]  These reasonable grounds must be based on facts that are known or reasonably foreseeable at the time of deciding not to make the offer, and may include:

• the employee’s position will cease to exist in the period of 12 months after the time of deciding not to make the offer;
• the hours of work which the employee is required to perform will be significantly reduced in that period;
• there will be a significant change in the days or times at which the employee’s hours of work are required to be performed; or
• making the offer would not comply with a recruitment or selection process required by or under a law of the Commonwealth or a State or a Territory.

Without doubt, in time, the Courts will find further circumstances constituting reasonable grounds not to make an offer as claims are brought before them.

It should be noted that an employer must not take steps, including the reduction or variance of an employee’s hours of work, or terminate an employee’s employment, in order to avoid the obligation to offer a casual conversion.^[7]  Any reasonable grounds for not offering a casual conversion must occur “organically” and not as the result of deliberate strategy.

A further exception is the small business exception.  A small business employer will not be required to make an offer of casual conversion pursuant to section 66AA of the Act.  A small business employer is one that has fewer than 15 employees at a particular time.

Employer’s obligations to provide CEIS

The Fair Work Ombudsman has prepared and publish the CEIS containing information about casual employment and offers and requests for a casual conversion. As soon as practical after employing a casual, the employer must provide the employee with the CEIS, that can be downloaded here: Casual Employee Information Statement.

Links and further references

Fair Work Amendment (Supporting Australia’s Jobs and Economy Recovery Act 2021 (Cth)

Fair Work Act 2009 (Cth)

Further information about employer obligations

If you need advice on complying with your obligations as an employer, contact us for a confidential and obligation-free discussion:

Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

[1] Fair Work Act 2009 (Cth) s 15A(3).
[2] Fair Work Act 2009 (Cth) s 15A(4).
[3] Fair Work Act 2009 (Cth) s 15A(5)(a) and (b).
[4] Fair Work Act 2009 (Cth) s 66E.
[5] Fair Work Act 2009 (Cth) s 66K.
[6] Fair Work Act 2009 (Cth) s 66C(a)(a).
[7] Fair Work Act 2009 (Cth) s 66L.

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