New casual employment laws have come into effect

Definition of casual employee The new laws have introduced a statutory definition of casual employment for the first time in Australia.  Specifically, a casual employee is a person to whom an offer has been made and accepted 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. Importantly, the new laws make it clear that the question of whether a person is a casual employee 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. This is designed to avoid the situation that has occurred in a number of recent cases where employees who were originally hired as casuals have subsequently challenged that characterisation on the basis of their particular working arrangements over a period of time.

New casual conversion provisions for employers Under the new laws, employers (other than small business employers) must offer casual employees the ability to convert their employment to permanent full-time or part-time in circumstances where:

• the employee has been employed for a period of 12 months; and
• during at least the last 6 months of that period, the employee has worked a regular pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to work as a full-time or part-time employee.

The offer must be made in writing within the period of 21 days after the end of the initial 12 month period. The casual employee must provide a written response within 21 days. If the employee does not respond within this timeframe, the employee will be taken to have declined the offer. Alternatively, if the employee accepts the offer, the employer must consult with the employee and provide a written notice confirming the new arrangements. Importantly, an employer does not need to offer a casual employee the ability to convert their employment to full-time or part-time if there are reasonable grounds not to make that offer. If an employer elects not to make an offer on that basis or because the employee has not worked a regular pattern of hours on an ongoing basis during at least the last 6 months of the initial 12 month employment period, the employer must notify the employee in writing of its decision and include details of the reasons for its decision. The notice must be provided within the period of 21 days after the end of the initial 12 month period. Employers have until 27 September 2021 to assess whether existing casual employees should be offered casual conversion.

Offset casual loading In circumstances where a casual employee is subsequently found by a Court to be a permanent employee at law, the Court can now offset any amount owed to the employee for permanent employee entitlements (such as annual leave and personal leave) against any identifiable casual loadings already paid to the employee during the employment. This represents a significant departure from previous cases where Courts awarded employees permanent entitlements in addition to any casual loadings which were previously paid.

Casual employment information statement Employers are now required to provide all new casual employees with a copy of the Casual Employment Information Statement published by the Fair Work Ombudsman before, or as soon as practicable after, the employee commences employment. Small business employers are required to provide the Casual Employment Information Statement to existing casual employees before or as soon as practicable after, 27 March 2021. All other employers have until 27 September 2021.

Casual employment disputes In the event of any disputes between employers and casual employees about the operation of the new casual laws, the parties must first attempt to resolve the dispute at the workplace level by discussions between the parties. If the dispute remains unresolved, a party may refer the dispute to the Fair Work Commission. However, this procedure will not apply if an applicable modern award, enterprise agreement, or employment contract includes a term that provides a procedure for dealing with such disputes.

Implications for employers The new laws give employers greater certainty regarding the meaning and incidences of casual employment. However, the laws also impose a greater administrative burden on employers in relation to making and receiving casual conversion requests as well as issuing the new Casual Employment Information Statement. From a practical perspective, employers should review their standard written employment contracts for casuals to ensure they properly reflect the new laws, in particular contracts should reflect the legal definition of casual employment and include a suitable dispute resolution procedure. In addition, employers should introduce a system to ensure they comply with the prescribed timeframes for offering or not offering casual conversion (as the case may be). Further, employers may wish to develop a template casual conversion offer document to be issued to eligible casuals as well as a template notice to casuals for when casual conversion will not be offered.