We can keep things casual: New casual employee laws enacted in Australia

The Australian government’s long awaited clarifying amendments to the Fair Work Act 2009 (Cth) have now been passed in their reduced form.

As flagged, the new statutory provisions make a number of changes to the engagement of casual employees.

Statutory definition of 'casual employee'

A person will fall under the new statutory definition of a 'casual employee' if an offer of employment is made to the person 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, the person accepts the offer on that basis. That aspect will be considered with respect to the following factors only:

• whether the employer can elect to offer work and whether the person can elect to accept or reject the 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.

Significantly, the question of 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 any subsequent conduct such as a nominally casual employee’s hours and pattern of work. Patterns of work have been a key component of several recently publicised decisions where Courts have held that nominally casual employees were in fact permanent employees.

Casual conversion entitlement

Under the new casual conversion entitlement, where certain requirements are met, employers (other than small business employers) will be required to make offers in writing to their casual employees to convert to full time or part-time employment if the casual employee has been employed for a period of 12 months, unless there are reasonable business grounds not to make the offer.

Once a conversion offer has been made, employees will have 21 days to provide a written response to the employer’s offer. Employees do not have to accept any conversation offer, but will have a residual right to make a written request to convert if they meet the criteria and if they have not previously received or accepted an offer from their employer to convert.

Casual Employment Information Statement

All employers are now required to give every new casual employee a Casual Employment Information Statement (CEIS) either before, or as soon as practicable after, commencement of their role with the employer. The CEIS contains information about the definition of 'casual employee' and the conversion entitlement.

Existing casual employees must also be provided with the CEIS. Employers other than small business employers must provide the CEIS to their casual employees as soon as possible after 27 September 2021, and small business employers must provide the CEIS as soon as possible after 27 March 2021.

Ability to offset casual loadings

The new provisions permitting Courts to offset any casual loading paid against any amount being claimed by an employee for permanent employment entitlements, directly address and close out the possibility of 'double dipping' following the recent and highly publicised decision of the Full Court of the Federal Court in WorkPac Pty Ltd v Rossato [2020] FCAFC 84, where it was held that the casual loading amount paid by the employer to the employee could not be offset against the amount that the employee was entitled to receive for permanent employment entitlements resulting from their misclassification as a casual employee.

Please don’t hesitate to reach out to our team who would be more than happy to discuss these changes with you.