There have been a number of changes made to casual employment under the Fair Work Act 2009.
The changes took effect from 26 August 2024 (or 25 February 2025 for small business employers with fewer than 15 employees).
Most modern awards have been updated to align with these new laws.
Below is a summary of the key changes.
New Definition of Casual Employee
The Fair Work Act has a new definition of ‘casual employee.’
An individual is considered a casual employee if, at the commencement of employment, there is no firm advance commitment to ongoing work, and they are entitled to a casual loading or a specific casual pay rate under an award, agreement, or employment contract.
Assessing the presence of a ‘firm advance commitment’ involves considering factors such as:
- the employer’s discretion in offering work
- the employee’s ability to accept or reject work
- the likelihood of future work availability
- the existence of full-time or part-time employees performing similar work, and
- whether the employee has a regular pattern of work.
Not all factors need to be satisfied, and a regular pattern of work alone does not necessarily indicate permanent employment.
For a casual employee engaged and working as a casual employee immediately before 26 August 2024 continues as casual under the new rules, unless they move to permanent employment. For these employees the previous casual employee definition still applies to periods of casual employment occurring before 26 August 2024.
Employee Choice Pathway for Casual Conversion
As part of the changes to the Fair Work Act, the ‘Employee Choice Pathway,’ was introduced replacing previous casual conversion rules.
From 26 August 2024 (or 25 February 2025 for small business employers with fewer than 15 employees), casual employees can notify their employer in writing of their intention to transition to permanent employment if they have been employed for at least six months (or 12 months for small business employers) and believe they no longer meet the casual employee definition.
Employers are required to respond in writing within 21 days, either accepting the request or providing valid reasons for refusal, such as the employee still meeting the casual definition or operational considerations. Employers cannot refuse conversion requests on unreasonable grounds.
Casual Employment Information Statement (CEIS)
Employers must provide the Casual Employment Information Statement to all casual employees at specific intervals:
- upon hiring
- after six months of employment
- after 12 months, and
- every 12 months thereafter.
The CEIS outlines the definition of a casual employee, the process for converting to permanent employment, and the role of the Fair Work Commission in dispute resolution.
Sham arrangements
It is unlawful for employers to misrepresent employment as casual to avoid certain entitlements. Employers cannot knowingly provide false information to persuade an employee to accept casual employment for the same work or dismiss an employee to re-engage them as a casual for similar duties. Courts can impose penalties for such practices.
What do you need to do?
- Members should review the employment arrangements and any employment contracts they have with their staff employment to ensure they reflect the revised definition of casual employment.
Please note that the Fair Work Ombudsman and Fair Work Commission now have expanded powers to investigate disputes related to casual conversion and employer compliance. Employees who successfully challenge their classification may be entitled to backpay for permanent employee entitlements (e.g. annual leave, sick leave).
Resources
The Fair Work Ombudsman provides further resources on its website.
