Changes to casual employment – industrial relations reforms

Wage Contract
The Fair Work Act 2009 (FW Act) was recently amended to change workplace rights and obligations for casual employees.

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The Fair Work Act 2009 (FW Act) was recently amended to change workplace rights and obligations for casual employees. These changes to the FW Act came into effect on 27 March 2021.

The changes introduced included:

  • A statutory definition of casual employment;
  • A pathway for casual employees to move to full-time or part-time (permanent) employment; and
  • The need for employers to provide casual employees with a Casual Employment Information Statement.

NatRoad members need to be aware of the changes and take proactive action to review and ensure compliance with the new provisions.

“Casual” employment defined

The new statutory definition of “casual employee” at s.15A of the FW Act places great importance on the initial offer of employment made to a casual employee. Specifically, that the employer makes (or made) the offer of employment to the employee with no firm advance commitment to continuing and indefinite work according to an agreed pattern of work. This, in essence, means that there must be an element of uncertainty around future employment.  The employee must also accept the employer’s offer on that basis. In such case, any subsequent conduct of the employer or employee is not determinative as to whether an employee is a casual employee.

Casual Conversion

Employer Offer

An employer (which is not a small business employer) has to offer a casual employee who has been employed by the employer 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 opportunity to convert to full-time or part-time (permanent) employment.  The employer’s offer must be consistent with the regular pattern of hours worked by the employee. An employer may avoid making a casual conversion offer on reasonable grounds, as defined by the FW Act.

Employee request

All employees, regardless of whether the employer is a small business (a business with less than 15 employees) or not, have a right to request casual conversion.  An employer after consultation with the employee, may only refuse a conversion request on “reasonable grounds” (as defined by the FW Act).

Casual Employment Information Statement (CEIS)

Employers are required to provide the CEIS to all casual employees at the commencement of employment. A copy of the CEIS can be download from the Fair Work Ombudsman’s website here.

Practical next steps

Members are strongly encouraged to do the following:

  • Provide all existing casual employees with a copy of the CEIS.
  • Review and revise current casual employment agreements or engage NatRoad to assist with this task. That review should have the objective of ensuring that casual agreements are in writing, are in compliance with the FW Act, (including having a clause separately identifying any casual loading amount), and checking that it covers each of the relevant entitlements stated in the FW Act. In most cases, this will require careful drafting of contract terms.
  • Implement a procedure for reviewing casual employees’ conversion to prevent administrative error or oversight that could lead to liability exposure. The offer should be made in writing for current casual employees prior to 27 September 2021, or within 21 days after 12 months of employment, whichever is later.
  • Employee requests for conversion should be logged and responded to appropriately, depending on the business, as follows:
    • for small business employers, casual employees can request conversion at any time; and
    • for all other employers, casual employees can request conversion after their employer has decided not to make an offer of permanent employment.

For those members who do have existing enterprise agreements which contain conversion provisions, we recommend you seek advice on:

  • The extent to which those provisions will continue to be recognised; and
  • Whether it is necessary to make an application to the Fair Work Commission to resolve any potential uncertainty in your agreement.

If your business requires guidance with reviewing its processes for engagement of casual employees, please contact a NatRoad adviser on (02) 6295 3000 or [email protected].

NatRoad communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Our advisors are available to clarify any questions you have and provide the right advice for your business and workforce. Contact NatRoad on (02) 6295 3000.