Date: September 21, 2021
The engagement of casual employees has been simplified for employers, provided that certain requirements are met. Employers that engage, or are intending to engage, casual employees should be familiar with the new statutory definition of a “casual employee” and the new casual conversion provisions.
NEW STATUTORY DEFINITION OF “CASUAL EMPLOYEE”
The Fair Work Act 2009 (Cth) (FW Act) was amended in 2021 to provide that a person is a casual employee if:
- an offer of employment made by the employer to the person is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person; and
- the person accepts the offer on that basis; and
- the person is an employee as a result of that acceptance.
The changes to the FW Act make it clear that for the purposes of determining whether, at the time the offer is made, the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person, regard must be had only to the following considerations:
- whether the employer can elect to offer work and whether the person can elect to accept or reject work;
- whether the person will work as required according to the needs of the employer;
- whether the employment is described as casual employment;
- whether the person will be entitled to a casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument.
The changes to the FW Act also make it clear that:
- a regular pattern of hours does not of itself indicate a firm advance commitment to continuing and indefinite work according to an agreed pattern of work; and
- the question of whether a person is a casual employee of an employer is to be assessed on the basis of the offer of employment and the acceptance of that offer, not on the basis of any subsequent conduct of either party.
One significant effect of these changes is that the terms of a relevant employee’s written contract of employment will be of paramount importance when seeking to determine whether they are a casual employee or not.
THE ROSSATO CASE
In Workac Pty Ltd v Rossato  HCA 23 (Rossato case), the High Court of Australia considered the meaning of casual employment. Although the above changes to the FW Act were not in place at the time of the relevant factual matters in the Rossato case, the High Court’s decision very closely aligns with the new statutory definition of a “casual employee” referred to above.
The High Court made it clear that in searching for the existence or otherwise of a “firm advance commitment” as to the duration of the employee’s employment or the days (or hours) the employee will work, the place to search is in relation to the enforceable terms of the employment contract and not “unenforceable expectations or understandings that might be said to reflect the manner in which the parties performed their agreement”. In short, it is the terms of the employment contract that will be relevant to this issue, not what employers and employees have, or have not done, or what they might think should be done.
CASUAL EMPLOYMENT CONTRACTS
The changes to the FW Act and the High Court’s decision in the Rossato case have re-emphasised the need for employers to ensure that suitable employment contracts are in place with any employees employed on a casual basis.
CASUAL CONVERSION OBLIGATIONS
The FW Act now contains casual conversion provisions which require certain employers to offer casual employees to convert to full-time or part-time employment and an ongoing residual right for casual employees of all employers to request this.
If your organisation employs casual employees and is not a “small business employer” (employing fewer than 15 employees), it should:
- assess casual employees for potential conversion to ongoing employment by 27 September 2021; and
- after the transition period ends on 27 September 2021, assess employees for potential conversion to full-time or part-time within 21 days of their employment anniversary date.
This Legal Update does not set out the substantive and procedural issues employers will need to consider when deciding whether or not to offer conversion to full-time or part-time employment.
Once the assessment process is completed by 27 September 2021, employers must provide the Fair Work Ombudsman’s Casual Employment Information Statement (see: Casual Employment Information Statement (fairwork.gov.au)) to any casual employees who have not converted to ongoing status.
After the transition period ends on 27 September 2021, all employers that engage casual employees (including “small business employers”) will have an ongoing obligation to consider requests for casual conversion if made by employees.
Employers should also consider any casual conversion entitlements under any applicable enterprise agreement or modern award and how these interact with the casual conversion provisions in the FW Act. The casual conversion provisions in the FW Act will apply where they provide terms which are more beneficial for an employee than any conversion provisions in a modern award or enterprise agreement.
Please contact us if your business requires assistance with employment law or industrial relations matters.
Whitehall Workplace Law
Level 14, 330 Collins Street, Melbourne, VIC 3000
This publication is for general reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice should always be obtained before taking any action based on this publication.
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