New Casual Employment Rules - what do you need to know?

Time is running out for employers to ensure compliance with the casual law amendments before the deadline of 27 September 2021. Employers who employ casual employees and are not classified as a small business for the purpose of the Act are required to take action soon.

On 22 March 2021 the Commonwealth Government passed legislation aimed to address the uncertainty around the engagement of casual employees. The amendments take effect from 27 Sept 2021.

Definition for casual employees

A person is considered a casual employee if they are offered employment with “no firm roster commitment” and tend to work less than full-time hours.

Determining whether there is an offer of casual employment requires looking at several factors. First, does the employer have to offer work and can you accept or reject it; Second, are you only working as required by your job description; Thirdly, what kind of contract did they sign with the company (e.g., "casual" vs. permanent)? Finally, am I entitled to a specific rate for being casual under the terms offered in this engagement letter or some other agreement like an industrial award or EBA? 

The evaluation of whether the definition is met must be made on an offer's basis, not a party's actions once they're hired.

Existing casual relationships captured

The amendments will apply retrospectively to old casual worker agreements and employers can now offset relevant entitlements with the casual loading. 

Casual Loading Offset

The definition of a "casual" employee within an agreement has also been extended in order to be more inclusive. Again, this will apply retrospectively to offers of casual employment that were given before the commencement of the amendment and relative entitlements include; 

• Annual leave;
• Personal/carer’s leave;
• Compassionate leave;
• Payment for absence on a public holiday;
• Payment in lieu of notice on termination; and
• Redundancy pay.

Casual Conversion to Permanent Employment

Employers, other than small businesses, must now offer casual employees conversion to part time or full time if:

• The employee has been employed for at least 12 months;
• In the last 6 months of employment, the employee has work a regular pattern of hours on an ongoing basis;
• This pattern of hours could continue on a permanent part time or full time basis without significant adjustment.

When an employee is eligible for conversion, this must be provided in writing within 21 days of the 12 months anniversary. Within 3 weeks of receiving written notice, employees can either accept or reject this opportunity to change their work schedule. If no response is given by then, employers may consider that as a rejection and not move forward without further negotiations between both parties. Should a conversion be accepted, within 21 days employers are required to provide a written notice to the employee confirming the hours of work and the date of effect and hold discussions with the employee about the details of the offer.

Importantly, an employer is not required to make a casual conversion offer if there are “reasonable grounds” for not doing so.

Reasonable grounds will include that in the following 12 months:

• The employee’s position will cease or the hours will significantly reduced; or
• There will be a significant change in the employees work days or hours of work and the employee cannot accommodate those changes.

Employers who have casual employees that meet the eligibility requirements must provide either a conversion offer or notice of an exemption by 27 September 2021.

Casual Employee Right to Request Conversion to Permanent Employment

All casual employees have the right to request permanent employment, which includes those employed by small businesses should they meet the eligibility requirements outlined above and in the past six months; 

• Have not refused an employer's offer for conversion;
• Have not received a reasonable business grounds exemption notice for their employer;
• The employer has not refused a previous conversion request and;
• The request is not made during the 21 days after an employer offer of conversion.

Significant Penalties for Breach

When breaching any of the provisions in this agreement, there are significant penalties that may be imposed. Notably conversion rights will also be considered a “workplace right” under the general protections provisions under Australia's Fair Work Act.

Casual Employment Information Statement

Employers must provide casual employees with a casual employment information statement before or as soon as practicable after the commencement of the employment.

Action Required by Employers

• By 27 September 2021 employers must review employment arrangements of each casual employee to ascertain whether they meet the eligibility requirements for the making of an offer of conversion of permanent employment.
• Carefully review the employment arrangements of all casual employees when they reach their 12 month anniversary to determine whether an offer of conversion to permanent employment should be made.
• Review all casual employment contracts. Ensure that the casual loading is specifically identified.
• Ensure that all new casual employees are provided with the Casual Employment Information Statement.

At TeamBlueSky we are working with our clients to help ensure they are able to be fully compliant by the cut off date. If you are using NetSuite/Infinet Cloud Solutions for your payroll, and are interested in learning more about our Managed Payroll Service, feel free to reach out to one of our experts. We are here to help.