Changes to casual employment

In late March 2021, the Fair Work Act 2009 (FW Act) was amended to change workplace rights and obligations for casual employees. These changes came into effect on 27 March 2021.

Over the past month the Fair Work Ombudsman has released further details on how these changes will impact both employees and employers together with the required process for any “casual conversion” offers, requests and acceptance. 

1. What’s Changed?

The Amendment Act introduces a:

  • Casual Employment Information Statement (CEIS)
  • definition of casual employment
  • pathway for casual employees to move to permanent full-time or part-time employment

2. Casual Employment Information Statement (CEIS)

New employees – All employers must provide every new casual employee with a Casual Employment Information Statement (the CEIS) before, or as soon as possible after they commence employment.   

Existing employees – Small business employers need to provide their existing casual employees a copy of the CEIS as soon as possible after 27 March 2021.

Other employers (other than small business) must provide their existing casual employees a copy of the CEIS as soon as possible after 27 September 2021.

If an employer employs a casual employee temporarily at different stages within a 12-month period, they only need to provide the CEIS once.

The CEIS provides information on:

  • The definition of a casual employee
  • When an employer has to offer casual conversion
  • When an employer doesn’t have to offer casual conversion
  • When a casual employee can request casual conversion
  • Casual conversion entitlements of casual employees employed by small business employers.
  • The role of the Fair Work Commission to deal with disputes about casual conversion.

Providing the CEIS

Employers can provide their casual employees the CEIS either:

  • In person
  • By mail

If the employee agrees, by emailing a copy of the CEIS or a link to the CEIS on the Fair Work website.

3. Definition of a casual employee

The Fair Work Act has been amended include a new definition of a casual employee.

Under the new definition, an individual will now be classified as a casual employee if an offer of employment is made and accepted on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work.

Where there is a firm advance commitment to continuing and indefinite work according to an agreed pattern of work will be assessed at the time the offer is made, rather than during the course of employment against the following 4 factors:

  1. Whether the employer can elect to offer work and whether the person can elect to accept or reject work;
  2. Whether the person will work only as required;
  3. Whether the employment is described as casual employment; and
  4. Whether the person will be entitled to a casual loading or specific rate of pay for casual employees under the terms of the offer or a fair work instrument (or another relevant instrument).

4. Existing casual employees

Casuals who were employed immediately before 27 March 2021, and whose initial employment offer meets the new definition of a casual employee will continue to be casual employees under the Fair Work Act.

A new entitlement has also been added to the National Employment Standards (NES) giving casual employees a pathway to become a full or part-time (permanent) employee.  This is known as “casual conversion”.  Please note – a revised NES document has also been released by Fair Work (new casual employees should receive a copy of both the NES and CEIS).

By 27 September 2021, employers (other than small business employers) need to assess whether any of their existing casual employees (employed before 27 March 2021), are eligible to be offered to convert to permanent employment.

Employers (other than a small business employer) have to offer their casual employee the opportunity to convert to full-time or part-time (permanent) when the employee:

  • has worked for their employer 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.

Some exceptions apply, including small business employers or if an employer has ‘reasonable grounds’ not to make an offer to a casual employee for casual conversion.

Within 21 days of completing the assessment, the employer needs to:

  • make a written offer to convert their casual employee to permanent employment, or
  • write to their employee explaining why they won’t be making an offer (this needs to be done no later than 27 September 2021).

5. Making and responding to offers and requests

There are rules for how employers and employees need to make and respond to offers (please refer to the CEIS for an outline of these requirements). There are also rules for offering casual conversion to existing casual employees.

Casual employees have a right to request to convert to full-time or part-time (permanent) employment in some circumstances. This applies:

  • for casual employees working for a small business – at any time if they meet the requirements.
  • for other casual employees – after their employer has decided not to make an offer for casual conversion.

6. Offering casual conversion

Employers (except small business employers) need to make a written offer to convert their casual employee to permanent employment within 21days of the employee’s 12-month anniversary if the employee:

  • has been employed by the employer for 12 months.
  • has worked a regular pattern of hours on an ongoing basis for at least the last 6 months.
  • could continue working these hours as a full-time or part-time employee without significant changes.

The offer needs to be for the employee to convert to:

  • full-time employment, if the employee’s hours worked for at least the last 6 months have been the same as full-time hours, or
  • part-time employment (consistent with the employee’s regular pattern of hours worked for at least the last 6 months), if the employee’s hours worked for at least the last 6 months have been less than full-time hours.

Find out whether an employee’s hours are full-time or part-time by checking:

  • the relevant award or agreement (if the employee is covered by one), or
  • the hours worked by other full-time or part-time employees who work in the same or a similar position.

7. How employees must respond to an offer

To accept an offer to convert, employees need to respond to their employer in writing within 21 days after receiving the offer. If they don’t respond, the employer can assume that the offer to convert has been declined. 

8. Employers not making an offer

If an employer (except a small business employer) decides not to offer casual conversion, the employer needs to write to the employee within 21 days of the employee’s 12-month anniversary informing the employee:

  • that they aren’t making an offer of casual conversion
  • the reasons for not making the offer.

The only reasons for not making an offer are:

  • the employee hasn’t worked a regular pattern of hours:
    • on an ongoing basis for at least the last 6 months
    • which they could continue working as a full-time or part-time employee without significant changes
  • the business has reasonable grounds for not making an offer.

9. Small business employers

Small business employers don’t have to offer to convert their casual employees to permanent employment. However, an eligible casual employee working for a small business employer can request to convert to permanent employment at any time on or after their 12-month anniversary.

Existing casuals working for a small business employer on 27 March 2021 can also make a request to convert to permanent at any time from 27 March 2021 if they are eligible.

To respond to an employee’s request to convert to a permanent position, employers need to write to them within 21 days to inform the employee whether they have or haven’t accepted their request.

  • If the employer refuses the request, the employer must inform the employee in writing of their reasons for the refusal.  Employers can’t refuse a request unless they have consulted the employee and have reasonable grounds to refuse the request.

10. Reasonable grounds for not making an offer or refusing a request for casual conversion

If an employer decides not to make an offer or refuses to accept a request for a casual employee to convert to permanent on ‘reasonable grounds’, the reasonable grounds they rely on have to be based on facts that are known or reasonably foreseeable.

Reasonable grounds for deciding not to make an offer can include that, in the next 12 months:

  • the employee’s position won’t exist.
  • the employee’s hours of work will significantly reduce.
  • the employee’s days or times of work will significantly change, and that can’t be accommodated within the employee’s available days or times for work.

Reasonable grounds can also include:

  • making the offer would not comply with a recruitment or selection process required by or under a Commonwealth, State or Territory law
  • the employer would have to make a significant adjustment to the employee’s work hours for them to be employed full-time or part-time.

11. Additional resources

For further details on the changes to casual employment please refer to the Fair Work Ombudsman website at https://www.fairwork.gov.au

In addition, full details on:

  • Employees requesting casual conversion.
  • Requests for casual conversion by existing casual employees
  • Employers responding to a request.
  • After an offer or request has been offered
  • Protections at work
  • Avenues for rectifying workplace problems

Can be found at: https://www.fairwork.gov.au/employee-entitlements/types-of-employees/casual-part-time-and-full-time/casual-employees/becoming-a-permanent-employee

A copy of the Casual Employment Information Statement can be downloaded at: https://www.fairwork.gov.au/employee-entitlements/national-employment-standards/casual-employment-information-statement

Updated Fair Work Information Statement can be found at: https://www.fairwork.gov.au/employee-entitlements/national-employment-standards

Definition of a small business employer:

A small business employer is an employer with fewer than 15 employees at a particular time. If an employer has 15 or more employees at a particular time, they are no longer a small business employer.

When counting the number of employees, employees of associated entities of the employer are included. Casual employees are not included unless engaged on a regular and systematic basis. Source reference: Fair Work Act 2009 s.23

https://www.fairwork.gov.au/Dictionary.aspx?TermID=2157