The upcoming changes to casual employment represent one of the final components of the federal government’s Closing Loopholes Legislation. As part of Closing Loopholes No.2 Act, this change is set to take effect on 26th August 2024. The casual employment changes are designed to provide greater job security and clarity for casual employees, ensuring they have more predictable and stable employment conditions.
The reform addresses several critical aspects of casual employment, including re-defining casual employment, creating clearer pathways to permanent employment and outlining new responsibilities for both employees and employers.
As per the Fair Work Ombudsman some of the key changes include:
New definition
The legislation aims to provide a clearer definition of casual employment. Under the new definition, an employee is classified as a casual only if:
- there isn’t a firm advance commitment to continuing and indefinite work, taking into account a number of factors, including the real substance, practical reality and true nature of the employment relationship
- they’re entitled to receive a casual loading or specific casual pay rate
Employees who start as a casual, will stay casual until their employment status changes either through
- a conversion process or Fair Work Commission order, or
- accepting an alternative employment offer and starting work on that basis
Changes to casual conversion
A new pathway will be introduced for eligible employees to change from casual employment to permanent employment, replacing the current rules for changing to permanent employment.
The new laws will enhance the right for casual employees to request a conversion to permanent employment if the employee:
- has been employed for at least 6 months (or 12 months if working for a small business employer)
- believes they no longer meet the requirements of the new casual employee definition
To do this, employees must provide written notice to an employer with their request to convert to permanent employment. The employer must respond in writing within 21 days of the employee giving their notification, either accepting or refusing the change.
Before responding, the employer must consult with the employee to discuss certain details of what will change if they are to move to permanent employment.
If the change is accepted, the response must include what the new employment status will be (eg. part time or full time), the new hours of work and when the change will take effect. If the change is refused the response must include the reasons for the refusal.
As per the new laws, employers can refuse the change if any of the following apply:
- the employee still meets the definition of a casual
- there are fair and reasonable operational grounds for not accepting the notification, including:
- substantial changes would be required to the way in which work in the employer’s business is organised
- there would be significant impacts on the operation of the employer’s business, or
- substantial changes to the employee’s employment conditions would be reasonably necessary to ensure the employer doesn’t break any rules (such as in an award or agreement) that would apply to the employee.
- accepting the change means the employer isn’t complying with a recruitment or selection process required by law
Handling any disputes about casual conversion
Under the new law, the Fair Work Commission will have more power to resolve disputes over casual employment status and conversion rights. This aims to ensure that casual employees can easily access their rights and seek redress if needed. The Commission would generally first try to resolve the dispute in an informal way (including by mediation or conciliation) If the dispute still isn’t resolved, the Commission is able to arbitrate the dispute. This is a more formal process and can result in a legally binding decision.
What can Employers do to prepare
To prepare for the upcoming changes, employers can take several proactive steps to ensure a smooth transition and compliance with the new casual employment regulations. Some additional steps that can be taken include the following:
- Review and update existing employment contracts to align with the new definition of casual employment. This includes stating the nature of the casual employment relationship and relevant terms and conditions of employment
- Conduct a thorough audit of the current workforce to identify casual employees who may be eligible for conversion and evaluate how these changes will impact the business operations and workforce planning
Provide training and develop clear guidelines for managers to follow on the new casual employment laws including how it may impact rostering requirements and future recruitment practices - Establish a clear and transparent process for casual employees to request conversion to permanent employment, including a standard application form and instructions on how to apply
- Maintain comprehensive records of all casual employment contracts, including any amendments made to reflect the new definition of casual employment. Document all conversion requests and the outcomes of these requests, including the justification for approval or rejection, to ensure transparency and consistency
- Ensure all new casual employees receive a copy of the updated Casual Employment Information Statement (CEIS) Casual Employment Information Statement (CEIS) upon commencement of their employment and distribute the new statement to existing casual employees so they understand their rights and obligations
The upcoming changes to casual employment represent a significant shift towards greater job security for casual workers and aims to create a more equitable and stable employment landscape. It is crucial for both employers and employees to familiarise themselves with this new legislation.
For further details regarding casual employment or any other Closing the Loopholes Legislation changes, please visit the Fair Work Ombudsman website Fair Work Closing Loopholes or reach out to Inspire HQ for assistance in reviewing your current employment contracts and policies and procedures. Visit our website www.inspirehq.com.au or give us a call on 5331 1734 to set up your free Inspire HQ People Hour.
Taryn Heinrich is passionate about working with people to bring out the best in them; by working closely with individuals and businesses, Taryn has a talent for being able to set them up with the tools to do their job safely and successfully. She has developed her HR generalist skills by working on various elements of Human Resources including investigations, performance management, employment contracts, and the development and implementation of policies and procedures. With a hands-on approach, Taryn prides herself on building effective and trusting relationships built on support, collaboration, stability and cooperation. Find more useful information and advice at www.inspirehq.com.au or by following Taryn on LinkedIn.