The Fair Work Act – changes to casual employment

The Fair Work Act has made changes to casual employment

The recent amendments to the Fair Work Act (FW Act) impact casual employment. The changes took effect from 27 March 2021.

The key changes are:

• the introduction of a statutory definition of casual employment;
• increased casual conversion obligations;
• creation of a Casual Employment Information Sheet;
• prevention of double dipping – where employees have received a casual loading.

Definition of a casual employee

The definition of a casual employee is a welcome addition to the FW Act as so far it has been up to the courts to decide on how to define a casual employee.

Under the new definition, a person is a casual employee if they accept a job offer from an employer and know that there is no firm advance commitment of ongoing work with an agreed pattern of work. To avoid doubt, a regular pattern of work does not itself indicate a firm advance commitment. Further, the question of whether a person is a casual employee is to be assessed looking at the offer of the employment and the acceptance of that offer, NOT the subsequent conduct of either party.

Therefore, it will be important for employers to ensure the terms of the offer of employment reflect casual employment.

Casual conversion requirements

The changes to the FW Act create a new National Employment Standard (NES) entitlement which places an onus on employers to offer casual employees to convert to full time or part time permanent employment where an employee:

• has been employed for 12 months;
• has worked a regular pattern of hours for at least the last 6 of those months on an ongoing basis;
• could continue working those hours as a permanent employee without significant changes.

Small business employers (those with less than 15 employees) are exempt as are employers who can demonstrate they have ‘reasonable grounds’ not to make an offer of casual conversion.

While casual conversion clauses have been in modern awards for a couple of years now, the addition of it in the NES means that it is now a minimum requirement for many employers. Further, modern awards did not place an onus on employers to offer casual conversion but rather gave employees the right to request that their employment be reviewed and changed.

Prevention of double dipping

The FW Act now aims to stop the ‘double dipping’ that occurred in previous cases, where a casual employee (who was paid a casual loading) was then also paid accrued entitlements (such as annual, personal and public holiday leave).

Courts will have the power to reduce amounts claimed by employees by taking into account the loadings employees have received in the past.