What Employers Need to Know About the New Casual Employment Definition
Updated: Sep 26
On August 26, 2024, significant changes to the Fair Work Act will take effect, introducing a new definition of ‘casual employee.’ As an employer, it’s crucial to understand how these changes impact your obligations and practices. Here’s a breakdown of what you need to know and prepare for.
Understanding the New Casual Employee Definition
Under the new definition, a person will be classified as a casual employee if:
There is no firm advance commitment to ongoing work, based on several specific factors.
The employee receives a casual loading or a specific casual pay rate as outlined in an award, registered agreement, or employment contract.
What This Means for Existing Casual Employees
For employees hired as casuals before August 26, 2024, they will continue to be recognised as casuals under the new definition unless they transition to permanent employment. Ensure you review the existing casual employee definition and how it applies to your current workforce.
Managing Casual Employees Hired After August 26, 2024
For casuals employed from August 26, 2024, the new definition will automatically apply. These employees will retain their casual status unless their employment is converted to permanent through:
The casual conversion process or a Fair Work Commission order, or
Acceptance of a new employment offer under different terms.
Key Considerations for Employers: Firm Advance Commitment
The concept of a firm advance commitment is central to determining casual status. As an employer, you need to assess this commitment by considering:
The true nature of the employment relationship and its practical realities.
Whether you offer work on a regular basis and if the employee can accept or decline work.
The likelihood of future work availability and whether similar roles in your business are filled by full-time or part-time employees.
The employee’s work pattern, even if it changes over time due to reasonable absences like illness or leave.
Remember, no single factor is decisive, and not all factors need to be met to classify someone as a casual. For instance, a regular pattern of work doesn’t automatically imply a firm advance commitment to ongoing employment.
Contracts and Employment Relationships
When assessing casual status, it’s important to look at the employment contract and any mutual understanding or expectations between you and your employee, even if they aren’t explicitly stated in the contract. These understandings can be inferred from how the contract is performed and the behaviour of both parties after the contract is signed.
Example Scenario: Casual Employment in Action
Consider Tom, a hospitality worker at a summer pop-up bar. Each week, you offer him a roster, and he decides which shifts to accept. Despite having a regular pattern of work, Josh remains a casual employee because there’s no firm advance commitment to ongoing work, and he receives a casual pay rate.
Fixed-Term Contracts for Casual Employees
You can generally employ casuals on fixed-term contracts, but there are specific exceptions, particularly in the higher education sector. Ensure that your contracts comply with these rules to avoid potential disputes.
Casual Conversion: Pathways to Permanent Employment
From August 26, 2024, a new pathway will allow eligible casual employees to convert to full-time or part-time (permanent) status if they choose. This new process will replace the current casual conversion rules, so make sure you’re familiar with the updated requirements.
Updating Awards and Casual Employment Terms
The Fair Work Commission is reviewing changes to awards as a result of these new casual employment rules. Stay informed about these updates to ensure your business remains compliant.
Obligations to Provide the Casual Employment Information Statement (CEIS)
Starting August 26, 2024, you must provide the Casual Employment Information Statement (CEIS) to all new casual employees before or as soon as they start work. Additionally, the CEIS must be provided at regular intervals throughout the employment relationship.
Avoiding Sham Arrangements
To prevent the misuse of casual employment arrangements, new protections will be in place from August 26, 2024. It will be illegal to:
Misrepresent casual employment terms to convince a full-time or part-time employee to switch to casual employment.
Dismiss or threaten to dismiss an employee to rehire them as a casual for the same or similar work.
Courts will have the power to impose substantial penalties for violations, with fines up to $93,900 for individuals and $469,500 for businesses.
Action Steps for Employers
Review and update your employment contracts and practices to align with the new casual employee definition.
Ensure you understand the casual conversion process and are prepared to manage requests from eligible employees.
Regularly update the Casual Employment Information Statement provided to casual employees to ensure compliance.
Avoid any practices that could be considered sham arrangements to protect your business from legal penalties.
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