On 27 March 2021, changes were made to the Fair Work Act 2009 (FWA) around the nature of casual employment. There are 4 key changes around:
- The definition of a ‘casual employee’;
- Casual conversion rights;
- The requirement to provide a ‘Casual Employment Information Statement’; and
- Double dipping protections.
If you hire casual employees, you must be across these changes to ensure you are complying with legislation and understand your obligations and rights when it comes to this type of employee.
1. Definition of ‘casual employee’
New definition of casual employee: If a person accepts a job offer from you knowing that there is no firm advance commitment to ongoing work with an agreed pattern of work, they are a casual employee.
Once that individual is employed, they remain a casual employee until they become a permanent employee either through casual conversion (see below) or are offered a full time or part time employment.
To determine if you made any firm advance commitment, the following factors will be considered:
- Can you, as the employer, elect to offer work?
- Can the employee accept or reject work?
- Will the person work only as required?
- Is the employment described as casual?
- Is the employee entitled to casual loading?
Key Takeaway: The casual nature of an employment is determined at the time the job is offered not by any action/s taken after the job commences.
2. Casual conversion rights
The FWA has never had a casual conversion clause before. Moving forward, all employers must offer to convert a casual employee to permanent employment, if the employee:
- Has been employed for 12 months; and
- During the last 6 months, has worked a regular and systematic pattern of hours without significant adjustment.
In the Electrical Award the employees have to make a request to convert but in the FWA the obligation is on the employer to offer the conversion.
An employer does not need to offer conversion where:
- There are reasonable business grounds not to offer conversion.
- It is a small business employer (less than 15 employees).
Reasonable business grounds includes:
- Where a significant adjustment to the employee’s hours of work in order for the employee to be employed permanently;
- Where the employee’s position will end in the 12 months after the conversion right arises;
- Where the hours of work then employee is required to perform will be significantly reduced in the 12 months after the conversion right arises; and
- Where there will be a significant change in either days or times on which the employee’s hours of work are required to be performed in the 12 months after the conversion right arises.
Key Takeaway: The Electrical Award already contains a provision for casual conversion, and it is different to the FWA, in that the casual employee only needs to have been employed for 6 months. before having the right to convert. The Fair Work Commission will have to review the Award to make amendments to allow for alignment of the Award with the FWA. They have set a deadline of 27 September,2021 for the completion of this review.
In the meantime, the FWA overrides the Electrical Award, any other Awards and any Enterprise Agreements that contain less generous provisions. But where the Electrical Award has more generous provisions, it continues to apply.
Action: If you currently have an employment contract or Enterprise Agreement that looks like it has less generous terms for casual conversion or if you are uncertain, you can get in touch with us for assistance.
3. Casual Employment Information Statement
The Fair Work Ombudsman was tasked with the job of creating a new Information Statement for casual employees, which must be provided to all casual employees when they start employment with you. A version has been published by the FWO but an updated version could be issued in the coming months.
Key Takeaway: For casual employees you must now provide two (2) Information Statements at the start of their employment; the standard ‘Fair Work Information Statement’ and the ‘Casual Employment Information Statement’.
If you are a small business employer, you need to give the Statement to existing casual employees (employed before 27 March 2021), as soon as possible after 27 March 2021.
Other employers must give existing casual employees a copy of it as soon as possible after 27 September 2021.
4. Double dipping protections
In the past, employers have faced problems with casual employees ‘double dipping’ in instances where they were eventually found to be permanent employees. These causal employees ‘double dipped’ by receiving both the casual loading as well as entitlements that only permanent employees receive, such as annual leave, sick leave, etc.
The FWA now affords some protection to employers by stating that (subject to some exceptions), a court must reduce any amount payable for the entitlements, by an amount equal to the casual loading amount.
Key Takeaway: This protection for employers, will only apply to entitlements and casual loading amounts paid on or after the commencement of 27 March 2021.
SIf you have any questions around these changes and would like to confirm if your business is doing the right thing, please get in touch with us via firstname.lastname@example.org or 1300 632 247 or via our Contact Us page. If you are a NECA Victoria member, the Workplace Relations team can assist you as part of your membership – email@example.com or via the Contact Us page.
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