This is a landmark development as it aims to reform casual work. It now includes a definition of casual employment and for the first time allows long term casual employees the right to request being converted to permanent employment.
Under the amended Fair Work Act, if a person is:
1. offered employment without a “firm advanced commitment to continuing and indefinite work”, and
2. the person accepts that offer,
then the person is a casual employee regardless of any changes in the employment relationship.
The considerations for determining whether a firm advance commitment to continuing and indefinite work exists include:
The second key change is offering a conversion from casual to permanent employment.
Following lobbying by business groups, the initial casual conversion proposed provisions have been amended so the obligation to offer conversion to casual employees does not apply to small businesses with a headcount of less than 15 employees.
*terms and conditions apply
Employers must offer to convert a casual employee to permanent employment if the employee:
1. has been employed for 12 months, and
2. during the last six months, has worked a regular and systematic pattern of hours without significant adjustment.
The offer to convert must be to either:
You are not obliged to make an offer if there are “reasonable business grounds”.
These include:
Under the amended Fair Work Act, unless there are reasonable business grounds, employers have an obligation to offer conversion regardless of an employee request.
If you don't offer conversion, you must give notice of the decision to your employee within 21 days of when the right to be offered conversion arose. If not the employee has a right to request conversion at a later date.
If an employee refuses an offer to convert, they lose the right to convert for the next six months.
If you determine there are reasonable business grounds to not make an offer of conversion and you notify the employee in accordance with the amended FW Act, the employee will have no right to request conversion for the next six months.
A new Casual Employment Information Statement is to be provided to each casual employee when they start their employment. This Statement is in addition to the Fair Work Information Statement that you already need to provide.
The amended Fair Work Act also deals with historical problems such as misclassifying employees as casuals which results in leave entitlements not being accrued.
In the situation whereby an employee is found to be incorrectly engaged as a casual (that is, by law they are a permanent employee), employers can offset any leave entitlements owed to the employee against the casual loading that is often paid to the casual employees.
To benefit this offset arrangement, the loading paid must have had components that can be identified as being paid to the employee instead of one or more leave entitlements.
For most employers, it will be time to ‘clean the house’ in terms of the arrangements you have in place governing casual employment.
Your next steps:
It may also be time to reassess your workforce mix and labour strategies to determine whether your existing arrangements can be optimised given the changed regulatory landscape.
It is important to note this information does not represent legal advice and you should seek specific legal advice for your circumstances. We recommend Australian Business Lawyers & Advisors to help with your workforce planning.
This article is an adaptation of the original piece written by Luis Izzo and appeared on Australian Business Lawyers & Advisors.
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