Skip to main content

On 22 March 2021, the Commonwealth Government passed legislation resulting in significant changes to the engagement of casual employees by an employer in Australia, with such changes coming into effect on 27 March 2021.  If you employ a casual employee(s), these legislative changes may affect your business.

Below is a summary of the key legislative changes to the engagement of casual employees.

1. DEFINITION OF CASUAL EMPLOYEE AND ITS IMPACT ON EXISTING CASUAL EMPLOYEES

The Fair Work Act 2009 (‘the Act’) now includes a definition of a casual employee. Namely that:

A person is considered a casual employee of an employer if:

  • 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
  • the person accepts the offer on that basis; and
  • the person is an employee as a result of that acceptance.

Whether an employee meets the above definition of a casual employee is determined on the terms of the employment contract, and not by the parties’ subsequent conduct or the employee’s actual pattern of work.

It is important to note that casual employees who were employed before 27 March 2021 and whose initial employment offer meets the above new definition, continue to be classified as casual employees under the Act.

2. CASUAL CONVERSION TO PERMANENT EMPLOYMENT

The Act now requires an employer, which is not a small business employer (a small business being an employer with less than 15 employees), to offer permanent employment to a casual employee who has been employed for:

  • a period of 12 months; and
  • who has worked a regular pattern of hours for the last 6 months of that 12 month period.

The employer’s offer of permanent employment must be consistent with the regular pattern of hours worked by the employee and must be made within twenty-one (21) days of the twelve (12) month anniversary of the employee.  However, in some circumstances where there are reasonable grounds for not doing so, an employer may not be required to make a casual conversion offer. For example, if the employee’s position was being made obsolete.

Whilst the new amendments to the Act exempt small businesses from having to make an offer of permanent employment to a casual staff member, it is important to note that, all employees, regardless of whether the employer is a small business, who fulfill the requirements in dot points 2A and 2B above, will have a right to request that their casual employment be changed to permanent .

3. CASUAL LOADING AMOUNTS

Where an employee has been wrongly classified as casual employee and is subsequently found to be a permanent employee, and that employee received an identifiable loading amount to compensate the employee for not having one or more relevant entitlements under the Act, the Act now provides that a Court can offset (but not below nil) any amount payable to the person for relevant entitlements by an amount equal to the loading amount.

4. CASUAL EMPLOYMENT INFORMATION STATEMENT

As of 27 March 2021, employers must ensure that all new casual employees are provided with the Casual Employment Information Statement, published by the Fair Work Ombudsman before, or as soon as practicable after, the employee commences employment as a casual employee with the employer.

small business employer, must ensure that is has given its existing casual employees a copy of the Casual Employment Information Statement, as soon as possible after 27 March 2021.

Other employers have to give their existing casual employees a copy of the Casual Employment Information Statement, as soon as practicable after 27 September 2021.

The above list is not an exhaustive list of all the changes that were recently passed by the Commonwealth Government.   We, therefore, encourage you to speak to a legal professional at Clarke Hemmerling Lawyers if you have any concerns about how your business may be affected by these recent changes to the law.   Please contact our office on 08 8333 2130 for a no obligation discussion.

This blog post does not constitute legal advice and should not be relied upon as such. It is a general commentary on matters that may be of interest to you.  Formal legal or other professional advice should be sought before acting or relying on any matter arising from this communication.