How do you tell whether someone is a casual employee? For a period, the concept was defined artificially under industrial awards and enterprise agreements. More recently, the courts have said that the defining element of casual employment is its uncertainty. This mean’t that each situation needed to be judged on its own merits, which itself led to uncertainty. We have previously suggested that casual employment is often a false economy given there has been a gradual expansion in the legal rights of casual employees over time. These events have occurred against a backdrop of increasing calls for security of employment. The federal government has now acted to bring some certainty back to casual employment. Only time will tell whether this object has been achieved. The major changes are:
Casual employment information statement (CEIS)
Small business employers (those with less than 15 employees) have to give their existing casual employees a CEIS ASAP after 27 March 2021. The CEIS can be downloaded from the Fair Work Ombudsman (FWO) website. For all other employers, the applicable date is 27 September 2021. All new casual employees have to be given a CEIS before, or as soon as practicable after, they start work. This is in addition to the requirement to give all new employees a Fair Work Information Statement (FWIS)
Who is a casual employee?
The Fair Work Act (FWA) now specifies that a person is a casual employee if they accept an offer of employment on the basis the employer makes “no firm advance commitment to continuing and indefinite work according to an agreed pattern of work”. A regular pattern of work hours is not a conclusive indicator and the time for assessment is when the offer is made and accepted, without account of the subsequent actions of the parties. The FWA specifies the only relevant factors are:
(a) whether the employer can elect to offer work and whether the person can elect to accept or reject work;
(b) whether the person will work as required according to the needs of the employer;
(c) whether the employment is described as casual employment;
(d) whether the person will be entitled to a casual loading or specific casual pay rate.
The trade off for this certainty is an increased capacity for conversion to permanent employment through a new National Employment Standard (NES) in the FWA. The effect is that employers (other than small business employers) MUST offer a casual employee the opportunity to convert to full-time or part-time employment when the employee:
• has worked for their employer for 12 months; and
• has worked a regular pattern of hours for at least the last 6 months on an ongoing basis; and
• could continue working those hours as a permanent employee without significant changes.
An employer does not have to make the offer if it has “reasonable grounds”. The FWA inclusively defines what might be reasonable grounds. Employers must give written notification to employees that they are not offering conversion. Separate to this employer obligation, employees have a right to request to convert to permanent employment:
(a) if they work for a small business – at any time if they meet the requirements;
(b) otherwise, after their employer has decided not to make an offer for casual conversion.
These requests must be in writing and employers must give a written response within 21 days setting out reasonable grounds for any refusal. Under transitional arrangements, employers have until 27 September 2021 to assess whether any existing employees are eligible to be offered conversion.
Casual conversion disputes
The Fair Work Commission (FWC) has been given broad powers to deal with disputes about casual conversion. However, the parties are required to attempt to resolve any dispute by direct discussions first. The Federal Circuit Court (FCC) has also been given new powers to deal with conversion disputes commenced through the small claims procedure. Award covered employees remain subject to award conversion requirements. The FWC will be conducting a review of these award terms to ensure they are consistent with the new NES.
It’s clear that the presence of a written offer of employment is more important than ever. Employers need to:
(a) ensure offers of employment are in writing and comply with the legal requirements;
(b) provide a CEIS to existing and new casual employees, in addition to the existing FWIS;
(c) if not a small business, assess the eligibility of existing employees by 27 September 2021, carefully diarise 12 month anniversaries of casual employees and keep documents to enable consideration of conversion;
(d) respond promptly and thoughtfully to conversion requests;
(e) be ready to deal with disputes about conversion, particularly through the FWC and FCC.
Employees also need to be alert to their rights and obligations and not assume that employers will always comply with the above requirements. Employees should also be conscious that conversion may result in a lower hourly rate of pay as a trade off for permanent entitlements to leave.
Further detail can be accessed at the FWO website. Please contact us if you would like any further information or help.