Casual Employment Changes

The Fair Work Act shifts focus to the true nature of employment relationships, redefining what it means to be a casual employee and introducing a new pathway to permanent employment.

From 26 August 2024 several changes were made to the Fair Work Act regarding casual employment.

1. Definition changes

An employee is now deemed to be a casual if:

• There isn’t a firm advance commitment to continuing and indefinite work, considering several factors, including the real substance, practical reality and true nature of the employment relationship.
• They're entitled to receive a casual loading or specific casual pay rate.

These changes mean that the focus is on the nature of the employment arrangement, rather than the historical lens which considered what an individual’s employment contract stated.

Employees who were employed casually before 26 August 2024 will stay casuals under the new definition unless they transition to permanent employment.

2. Changes to casual conversion

A new pathway to casual conversion has been introduced and employers are now no longer required to make casual conversion offers to employees.

Instead, employees can notify their employer of their intention to change to permanent employees if they:

• Have been employed for at least 6 months (or 12 months if working for a small business employer);
• Believe they no longer meet the requirements of the new casual employee definition;
• Are not currently engaged in an ongoing dispute with their employer about casual conversion; and
• Have not, in the last 6 months, been refused a casual conversion request by their employer or resolved a dispute with them about casual conversion.

Before responding to an employee’s conversion notification, the employer must consult with them. After consultation, and within 21 days of the employee giving the notification, the employer is required to respond in writing either accepting or refusing the change.

Where employers accept the change, the written response must include:

• What the employee’s new status is (part-time or full-time)
• The new hours of work
• The date the change will take effect.

Where employers refuse the change, the written response must include the reason(s) for the refusal. An employer can refuse a request if:

• The employee continues to meet the definition of a casual
• There are fair and reasonable operational grounds including:
• Substantial changes would be required to the way in which work in the employer’s business is organised;
• There would be significant impacts on the operation of the employer’s business; or
• Substantial changes to the employee’s employment conditions would be reasonably necessary to ensure the employer does not breach any rules (e.g., in an award or agreement) that would apply to the employee.
• Accepting the change would mean that the employer would not be complying with a recruitment or selection process required by law.

The changes to casual conversion will take place from 26 February 2025 for small business employers.

3. Casual Employment Information Statement (CEIS)

The CEIS is a document with information about employment conditions that an employer must provide to all new casual employees.

Following the 26 August 2024 changes, this now needs to be provided to:

• All new casual employees before, or as soon as possible after, the start of their employment.

• All casual employees employed by non-small businesses as soon as possible after:

• o 6 months of employment;

• o 12 months of employment; and

• o Every subsequent period of 12 months of employment.

What should employers do?

If not already done so, employers should:

• Review and update their casual employment contracts to align with the new definition of casual employment;
• Review their casual workforce to identify any individuals who may be eligible for casual conversion;
• Consider whether existing casual conversion processes and procedures will comply with the new laws and amend them;
• Diarise obligations to update and issue casual employment information statements at the required intervals.

If you have questions and need advice on what course of action you may need to take, contact our Governance, Risk, and Compliance team today.