Changes to casual employment: 3 Major changes employers must know

Do you have casual employees or long-term casual employees? If so, don’t miss this edition of Ask an Employment Lawyer, a series by Recruitment Marketing Magazine with Jonathan Mamaril, Director for NB Lawyers – Lawyers for Employers. If you’re a talent leader or HR professional subscribed to RMM, ask any talent engagement, employment law or workplace-related question and have it answered in this series. 

Casual employment has been a flexible and commercial way to utilise a workforce in industries with project work or natural ebbs and flows. The recent WorkPac cases of Rossato and Skene, the aftershock of COVID-19, a post-JobKeeper landscape and high-profile political debate from various stakeholders has led to, the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 (Act) – effective since 27 March 2021.

The purpose of the Fair Work Amendment Act 

The aim of the Act is to improve the operation and usability of Australia’s national industrial relations system. The Act has been introduced in the context of, and is intended to respond to, Australia’s ongoing economic recovery in the wake of the COVID-19 pandemic. The Act’s proposed reforms primarily relate to:

• Casual employment
• Flexibility under modern awards for industries impacted by COVID-19
• The making and approval of enterprise bargaining agreements
• Greenfield agreements and major projects
• Compliance and enforcement (including in relation to wage theft).

The 3 major changes for casual employment

The Act will require some onerous obligations including:

1. Introducing the Casual Employment Information Statement
2. Redefining casual employment
3. Creating a pathway to transition a casual employee to permanent employment.

Change 1: Casual employment information statement

The Casual Employment Information Statement is similar to the existing Fair Work Information Statement which must be provided to all employees covered by the National Employment Standards. The Casual Employee Information Statement must also be provided to all casual employees including existing employees and contains information about:

• The definition of a casual employee
• When an employer has to offer a casual employee conversion to permanent employment
• When a casual employee can request a conversion
• Other information related to casual employment.

For small business employers (those with less than 15 employees) the Casual Employment Information Statement must be provided as soon as possible. For all other employers, this can be provided after 27 September 2021.

Change 2: The definition of “casual employee”

Before the adoption of the Act, the Fair Work Act 2009 (Cth) (FWA) contained no definition of casual employment. The exception to this was definition of a ‘long-term casual employee’.

The Act, section 15A provides a clearer definition to casual employment, which states:

A person is 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.

Within the above provision, we view there is a clear attempt to craft a definition of casual employment as any employment where there is no commitment to ongoing work. Further, the Act set out considerations that will allow the Fair Work Commission to put themselves in the shoes of the parties to determine if a casual employment relationship was created.

The objective question that comes from this provision and will likely be later assessed by the Fair Work Commission is what forms the basis of ‘no firm advance commitment’ to ongoing employment.

Change 3: Casual conversion

The Act provides for ‘Employee requests’ within section 66F of the Act, which states:

• A casual employee may make a request of an employer under this section if:
• the employee has been employed by the employer for a period of at least 12 months beginning the day the employment started; and
• the employee has, in the period of 6 months ending the day the request is given, worked a regular pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to work as a full‑time employee or a part‑time employee (as the case may be).

Previously, only Modern Awards allowed for conversion requests. The result of this provision is that the conversion request has now been codified and is available to all National System Employees that are covered by the FWA.

Importantly, section 66B of the Act provides that an employer must make an offer to a casual employee for conversion if they have been employed for a period of 12 months and have had a regular pattern of hours for the previous 6 months. There are exceptions to the above requirement which are based on the reasonableness of the request.