Recently, there’s been a number of legislative and award changes to casual employment: namely what defines a casual employee, as well as the increased opportunity for casuals to convert to permanent employment.
If you currently employ casuals or will employ casuals in the future, it’s worthwhile being across the following key changes:
1. Casual Conversion – the National Employment Standards (NES) now includes a pathway for casuals to be offered and/or request to convert to permanent part-time or full-time employment.
Employers (*other than small business employers – see below) are required to write to their casual employees within 21 days of the casual reaching their 12-month anniversary of employment and either:
a) Offer conversion to part-time or full-time if the casual has:
- worked a regular pattern of hours on an ongoing basis for at least the last 6 months; and
- could continue working these hours as a full-time or part-time employee without significant changes
b) By September 27th, 2021, employers must have assessed whether their existing casual employees (employed before March 27th, 2021) were eligible for permanent employment and given notice to the casual that the business will not be making an offer of conversion. This notice should include an acknowledgement that though they have been employed by the business for more than 12 months, the employer will not be making a permanent offer of employment at this time, and provide a reason for not doing so.
c) Fair Work provide reasonable grounds for deciding not to make an offer. These include that over the next 12 months:
- the employee’s position won’t exist;
- the employee’s hours of work will significantly reduce;
- the employee’s days or times of work will significantly change, and that can’t be accommodated within the employee’s available days or times for work;
- making an offer would not comply with a recruitment or selection process required by or under a Commonwealth, State or Territory law; or
- the employer would have to make a significant adjustment to the employee’s work hours for them to be employed full-time or part-time.
*Note: small businesses with less than 15 employees are not required to offer their casual employees a permanent position.
2. Casual employee definition – the Federal Government recently passed the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020, which made an important distinction in defining casual employment. Most notable is that an employee is deemed to be a casual if they if they accept an employer’s job offer knowing that there is no firm advance commitment to ongoing work with an agreed pattern of work. That is, the determination of whether an employee is a casual or not, occurs at the time the offer of employment is made and accepted. It’s therefore imperative that casual employment contracts are drafted correctly and contain appropriate clauses:
- to ensure the employment relationship is correctly defined as ‘casual’; and
- to ensure that contractual clauses do not inadvertently give rise to a potential claim that the casual is owed permanent entitlements, including but not limited to annual leave entitlements.
3. Fair Work Casual Employment Information Statement – in addition to the Fair Work Information Statement, employers are also required to provide all new casual employees, with the Casual Employment Information Statement upon commencement.
What you need to do:
- Review your Award – in addition to the NES requirement around Casual Conversion (as outlined above), it’s also important to review the Award that covers your casual employees. Review the relevant award for your industry to determine any specific obligations around requests and offers for casuals to convert to permanent employment.
- Review and update your casual employment contract – ensure that that casual contract clauses correctly characterise the employment as being casual.
- Update your Onboarding process – ensure that the Casual Employment Information Statement is being provided to your new casual employees.
The above is intended as general information, however the specific requirements will vary depending on your business. If you require assistance in navigating these changes, understanding how to protect your business from potential Fair Work claims and understanding your obligations as an employer, feel free to give us a call.
Nick Hedges is the founder of Resolve HR, a Sydney-based HR consultancy specialising in providing workplace advice to managers and business owners. He recently published his first book, “Is Your Team Failing Or Kicking Goals – Take control of your people and their performance”. It is a practical response to the most pressing HR challenges, which can be found at https://resolvehr.com.au/
Disclaimer: The contents do not constitute legal advice and does not cater for individual circumstances. The information contained herein is not intended to be a substitute for legal advice and should not be relied upon as such.