Changes to the Fair Work Act for Casual Employees: What you need to know

On 27 March 2021, the Federal Government amended the Fair Work Act dealing with casual employees to overcome the effect of recent federal court decision.

Section 15A has been included in the legislation which for the first time introduces a statutory definition of a casual employee.
A person is a casual employee of an employer if:

1. 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
2. b) The person accepts the offer on that basis; and
3. c) The person is an employee as a result of that acceptance.

In determining whether at the time the offer is made, the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person, regard must only be had to the following conditions:

1. a) Whether the employer can elect to offer work and whether the person can elect to accept or reject work;
2. b) Whether the person will work as required according to the needs of the employer;
3. c) Whether the employment is described as casual employment; and
4. d) 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 question of whether a person is a casual employee must be assessed on the basis of the offer of employment that is made, and the subsequent acceptance of that offer, and not on the basis of any subsequent conduct of the parties.

The inclusion of section 15A into the legislation provides some much-needed certainty for employers.

Although the question of whether or not an employee is a casual employee is determined the basis of the offer of employment that is made, the subsequent conduct of the parties may mean that the employee has a right to convert their employment from casual employment to permanent employment.

An employer who is not a small business employer is required to make an offer to a casual employee to convert their employment to permanent employment under section 66B of the Act if:

1. a) The employee has been employed by the employer for a period of 12 months; and
2. b) During at least the last six 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 employee or a part-time employee.

The offer must be given in writing to the employee within 21 days of the end of the 12 month period.

The offer must be to convert to full-time or part-time employment depending on whether or not the employee has worked equivalent of full-time or part-time hours during the last six months.

The employer is not required to make an offer of employment to a casual employee if there are reasonable grounds not make the offer and the reasonable grounds are based on facts that are known, or reasonably foreseeable, at the time of deciding not to make the offer.
Reasonable grounds for deciding not to make an offer include:

1. a) The employee’s position will cease to exist in the period of 12 months after the time of deciding not to make the offer;
2. b) The hours of work which the employee is required to perform will be significantly reduced in that period;
3. c) There will be a significant change in either or both of the following in that period:

(i) The days on which the employee’s hours of work are required to be performed;

(ii) The times at which the employee’s hours of work are required to be performed;
which cannot be accommodated within the days or times the employee is available to work during that period;

1. d) 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 territory.

A small business, that is one that has less than 15 employees, is not required to make an offer of conversion.

If the employer decides not to make an offer to the employee or the employee has been employed by the employer for the 12 month period but has not worked a regular pattern of hours an ongoing basis in the last six months, the employer must advise the employee that it is not making an office employment and set out the reasons for not making an offer. The notice must be given within 21 days after the end of the 12 month period.

If an offer of conversion is made to an employee, the employee must give a written response to the employer within 21 days, accepting or rejecting the offer. If the employee does not give a written notice, the employee is deemed to have declined the offer.

An employee also has a right under the legislation to request their employment be converted from causal employment to permanent employment if:

1. a) The employee has been employed for a period of 12 months;
2. b) The employee has, in the six month period ending on 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 or part-time employee; and
3. c) All of the following apply:

(i) The employee has not in the last six months refused an offer made to it by the employer;

(ii) The employer has not any time during the six month period given the employee a notice setting out that it had decided not to make an offer on reasonable grounds;

(iii) The employer has not at any time during the six month period given a response to the employee refusing a previous request made to convert their employment; and

(iv) If the employer is not a small business employer, the request is not made during the period 21 days after end of the 12 months since they commence employment.

If the employee does make a request, the employer must provide a response within 21 days. The employer must not refuse a request unless it consults with the employee, there are reasonable grounds to refuse a request and the reasonable grounds are based on facts that are known or reasonably foreseeable at the time of refusing the request.

An employer with existing casual employees needs to assess whether or not to make an offer by 27 September 2021 (6 months after the legislation was introduced) or 12 months after the employee commenced employment, whichever is earlier.

A number of modern awards also contain provisions regarding an employee’s right to convert, so an employer will need to make sure they review not only the Fair Work Act., but also the applicable award.

The legislation seeks to provide balance between employers and casual employees, by defining what is a casual employee and also includes a mechanism for a casual employee to convert to a permanent employee if they work a regular pattern of hours of work over an extended period of time.

There is also a new casual employment information statement, to be given to new and existing casual employees.

For new casual employees the statement must be given as soon as possible after the employee starts. For existing employees, if the employer is a small business, the statement must be given as soon as possible. All other employers must give the statement before 27 September 2021.

A copy of the statement can be found here.

Employers of casual employees will need to ensure they comply with the requirement to provide casual employment information statement
within the time required.

If you like further information or assistance in dealing with your casual employees, please contact Darren Miller on 9488 1300 or at darren.miller@culshawmiller.com.au.