Session 1 - Preparing for… a new casual employment landscape?

We recently wrote about the right to disconnect introduced by the Government’s “Closing Loopholes” legislation and in this article we explore some of the changes to the casual employment landscape introduced by the amending legislation.

Casual employees – a case of back to the future?

The definition of ‘casual employee’ adopted from the High Court’s decision in Rossato is that a casual employee is one who has no firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work. At this point in time, whether an employee is a ‘casual’ is assessed by reference to what was agreed between the employer and employee at the time the employment contract was entered into, and not what subsequently unfolded after the contract was agreed.

From 26 August 2024, we will see a new definition of ‘casual employee’ introduced into the Fair Work Act which will broadly reflect the approach before the Rossato decision.

Under the new definition, an employee will be a casual employee only if:

• the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work; and

• the employee is ‘entitled to’ either a casual loading or a specific rate of pay for casual employees under the terms of an applicable industrial instrument or under the terms of their employment contract.

When determining whether there is an absence of a firm advance commitment to continuing and indefinite work, a number of factors are to be taken into account, including:

• the real substance, practical reality and true nature of the employment relationship;

• what the employment contract says;

• whether the employer has the choice to offer work or not, and whether the employee is able to accept, or not accept, work (and whether this occurs in practice);

• whether there are permanent employees performing the same kind of work as the employee;

• whether there is a regular pattern of work for the employee.

Employee choice framework

A further significant change regarding casual employees is to the casual conversion provisions. From 26 August 2024, the old conversion regime is being replaced with a new – but similar – “employee choice framework” where casual employees can request to be converted to permanent employment if they believe their employment no longer fits the definition of casual employment.

Casual employees are only eligible to request conversion if they:

• believe they no longer meet the definition of casual employment;

• do not have a current dispute about casual conversion;

• have been employed for at least 6 months (12 months for small business employers); and

• have not, in the last 6 months, had a dispute about casual conversion or notification refused.

Eligible casual employees wishing to covert must provide notice to their employer in writing that they would like to change their status to full-time or part-time employment. Before providing a response, the employer must consult with the employee about the notification, and if accepting the notification, discuss matters including hours of work and the date that the change will take effect. Employers must respond in writing within 21 days, either accepting or rejecting the notification.

The grounds on which an employer can refuse an employee's request have also been broadened to include:

• that the employee still satisfies the definition of a casual employee;

• there are fair and reasonable operational grounds for not accepting the notification – for example, the conversion would require substantial changes to the way work is organised or there would be significant operational impacts; or

• accepting the notification would result in the employer not complying with a recruitment or selection process required by or under a law of the Commonwealth or a State or Territory.

Dispute resolution

The existing procedure for dealing with casual conversion disputes will also be replaced with a new dispute procedure.

The employer and employee must first attempt to have discussions to try and resolve the dispute.

If these discussions are unsuccessful, either party may refer the dispute to the Fair Work Commission. The Commission will first try and deal with the dispute through either mediation, conciliation, making a recommendation or expressing an opinion. If the dispute still cannot be resolved, the Commission can arbitrate the dispute.

Employees will also have access to the small claims jurisdiction of the Federal Circuit and Family Court of Australia to have their dispute heard. This is a process designed to settle dispute relatively quickly and with minimal expense.

Casual employment information statement

Employers are currently required to provide casual employees with a Casual Employment Information Statement before, or as soon as practicable after, the casual employee commences employment with the employer.

From 26 August 2024, this current obligation is broadened and employers will need to also provide the information statement:

• as soon as practicable after the 6 month anniversary of the day the employment started; and

• as soon as practicable after the following:

• of the 12 month anniversary of the day the employment started; and/or

• the end of any subsequent 12 month period for which the employee is employed.

Importantly, the calculation as to when the information statement is to be provided is based on the employee’s anniversary date and it is not the same date for all casuals.

Small business employers are not required to provide the information statement after 6 months or at the end of every subsequent 12 month period.

What practical steps can employers take now?

Employers should audit current casual engagements to ensure that there is no ‘firm advance commitment’ to continuing and indefinite work.

Employers should also review casual contracts to determine if they require updating to reflect the nature of casual employment, keeping in mind that a Court will look behind the contract to determine whether an employee is truly a casual.

Employers should also carefully monitor casual engagements to ensure these engagements reflect that of casual employment.