Casual employees

Changes to the Fair Work Act 2009 affecting casual employment provisions took effect on 26 August 2024. These changes include a new definition of casual employment and new ‘employee choice’ casual conversion provisions.

Definition of casual employment

Under the new definition of casual employment, an employee will only be considered a casual employee if:

• The employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work; and
• The employee would be entitled to a casual loading or a specific rate of pay for casual employees under the terms of an industrial instrument (Award or Enterprise Agreement) if the employee were a casual employee, or the employee is entitled to such a loading or rate of pay under the contract of employment.

For the purposes of determining whether the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work, the new laws say that this will require a consideration of the “real substance, practical reality and true nature of the employment relationship”. It requires employers to look beyond the written terms of engagement or contract to determine whether an employee is truly a casual.

In determining employment status, regard should be had to:

• Whether there is an inability of the employer to elect to offer work or an inability of the employee to elect to accept or reject work (and whether this occurs in practice),
• Whether, having regard to the nature of the employer’s enterprise, it is reasonably likely that there will be future availability of continuing work in that enterprise of the kind usually performed by the employee,
• Whether there are full time employees or part time employees performing the same kind of work in the employer’s enterprise that is usually performed by the employee, and
• Whether there is a regular pattern of work for the employee (although this doesn’t have to be “absolutely uniform” and may include some fluctuation or variation over time, including for reasonable absences such as illness, injury or recreation).

Not every consideration mentioned above will definitely decide if someone is a permanent employee, and not all of those factors have to be met for someone to be considered a permanent employee.

This definition does not include a requirement for an agreed regular pattern of work. Accordingly, an employee who has a regular pattern of work may still be a casual employee if there is no firm advance commitment to continuing and indefinite work.

Casual conversion

The new casual conversion process replaces existing casual conversion laws which require employers to notify employees of their rights to convert. This change will took effect on 26 August 2024.

Casual employees will have a new right to inform their employer that they believe they are no longer casual, and that they will become permanent employees. This is done by the casual employee giving written notification that they believe they no longer meet the requirements set out in the casual employment definition.

• For employees in a small business, this notification can be given after 12 months of casual engagement, and for employees on all other businesses, this notification can be given after six months.
• The notification can only be given if they have not previously refused an offer to convert and meet other eligibility criteria.

After receiving the written notification, an employer must consult with the employee, and then respond in writing as to whether or not they accept the employee’s notification. This will need to be done within 21 days of the employer receiving the notification. If the employer accepts the notification, the employer will need to notify the employee:

• Whether the employee is changing to full or part time,
• Their hours of work after the change, and
• The day of the change, which must be the beginning of the first pay period after the employer’s response unless otherwise agreed between the employer and the employee.

If the employer does not accept the notification, they will need to provide a written response that contains:

• The reasons for declining,
• A statement that the employee may dispute the decision, and
• A statement that if a dispute is not resolved, the employee may apply to the Fair Work Commission.

The grounds for an employer refusing a request include:

• That the employee still meets the definition of casual employment,
• That accepting the notification would be impractical and substantial changes to the employee’s terms and conditions (i.e. that would significantly affect the way the employee would need to work) would be necessary to meet the request,
• That accepting the notification would affect compliance with a recruitment or selection process required under a law of the Commonwealth, a state or territory,
• That substantial changes would be required to the way in the employer’s enterprise is organised,
• There would be significant impacts on the employer’s enterprise, and
• That substantial changes to the employee’s terms and conditions would be reasonably necessary.

If there is a dispute between the employee and employer about a decision regarding the casual notification, they will first need to attempt to resolve it at the workplace level.  If no resolution is reached, they may apply to the Fair Work Commission to have the dispute mediated/conciliated, or in some circumstances, arbitrated.

We recommend members contact us if they receive a notification for advice on how to respond.

The Act places a legal obligation on employers to convert casual employees to full-time or part-time (permanent) in some circumstances.

Casual Employment Information Statement

All casual employees must receive the Casual Employment Information Statement.