We want to let you know about changes to the Fair Work Act 2009 (FW Act) that will start on August 26, 2024. The new rules make it easier to decide if an employee is casual by focusing on how the work is actually done, not just what’s in the employment contract. Key points include whether there is no promise of ongoing work and if the employee gets casual loading or casual pay rates. Employers will now need to look closely at how often the employee works and if their hours are regular when classifying someone as casual.
Previously, under section 15A – meaning of a casual employee of the FW Act, the definition of casual employment was:
a) An offer of employment made by the employer on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work; and
b) The person accepts the offer on that basis; and
c) The person is an employee as a result of the acceptance.
Commencing August 26, 2024, a casual employee is defined in the Fair Work Act as:
a) the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work; and
b) the employee would be entitled to a casual loading or a specific rate of pay for casual employees.
The new definition of casual employment considers the practical reality of the relationship, as opposed to merely the terms in the employment contract (as was previously the case).
In determining whether there is a “firm advance commitment to continuing and indefinite work”, the Fair Work Commission will consider various criteria, including:
- If the employer can offer or not offer work to the employee (and whether this is happening).
- If the employee can accept or reject work (and whether this is happening).
- It is reasonably likely there will be future work available of the kind the employee usually performs in the employer’s business, based on the nature of the business.
- There are full-time or part-time employees performing the same kind of work in the employer’s business as the work the employee usually performs.
- The employee has a regular pattern of work even if it changes over time due to e.g. illness, injury or other leave.
The above is not a full list and other factors may apply.
Changing from casual to full-time or part-time employment
After August 26, 2024, for employees that commence after that date, employers are no longer required to make an offer to an employee that meets the requirements of casual conversion. Instead, the process to request to convert to permanent employment is instead made by an employee via an employee choice notification.
If an employee has been employed for 6 months, or 12 months for a small business, and believes they no longer meet the (new) definition of a casual employee, they can seek to change their employment status to permanent.
Casual employees can write to their employer to notify them that they’d like to change their employment status, and employers are required to consult with the employee and respond in writing within 21 days.
A refusal can only be made in limited circumstances such as:
- an employee still meeting the conditions of being a casual in accordance with section 15A of the Fair Work Act;
- fair and reasonable business grounds for not accepting the notification existing; or
- accepting the notification would breach a recruitment or selection process legislative requirement under the law.
Source: Fair Work Ombudsman
Casual Employment Information Statement
Currently, an employer is required to provide a casual employee with the Fair Work “Casual Employment Information Statement” upon their commencement. Moving forward, casual employees will also need to be provided with this statement:
- for small business employers – after 12 months of employment
- for other employers – after 6 and 12 months of employment, and then after every 12 months of employment.
Employers should ensure they provide employees with the most current version of this Statement which is available via www.fairwork.gov.au.
Avoidance penalties
The changes will also introduce two new anti-avoidance provisions to prevent employers from improperly engaging casual workers.
This means employers must not:
- Dismiss or threaten to dismiss an employee with the plan to then re-engage them as casual to do the same or substantially similar work.
- Make knowingly false statements in order to influence an employee to enter into a casual employment contract, to perform the same or substantially similar work.
The maximum penalties for breaches will be:
- $93,900 for individuals, and
- $469,500 for businesses.
