From 26 August, the definition of “casual employment” and the rules around “casual conversion” change. Here is a summary of what you need to know but we encourage you to contact us to evaluate how these changes will impact your business.
What does casual employment look like?
Under changes to the Fair Work Act, a casual employee has been offered a position with your organisation with the understanding:
- There is no firm, advanced commitment for ongoing work
- There is no agreed pattern of work
- Their roster is likely to change each week to suit your business requirements
- The casual employee can refuse to work a particular shift or can swap shifts with other employees
- They will be paid a casual loading (i.e. a higher rate of pay than permanent employees) for the work they do
- They will not receive benefits such as paid sick leave or termination/redundancy payments
A casual employee may work full-time or part-time in your business.
After 12 months, eligible casual workers can apply for permanent employment.
If you employ more than 15 people, you must offer eligible casual employees permanent employment within 21 days of their 12 month anniversary of working for you.
However, any casual employee can ask for permanent employment after their 12 month anniversary – regardless of the size of your organisation.
What is an eligible casual employee?
The reality is, when you find a good casual employee and they enjoy working with your business, a regular pattern of employment often develops. If this pattern is established within 6 months of their 12 month work anniversary, they can apply for casual conversion.
In addition, if you employ 15+ people in your business, you are legally obliged to offer permanent employment (with the same pattern of hours) within 21 days of their work anniversary. If this isn’t possible, you are required to provide reasonable grounds for refusing to offer permanent employment. This must also be provided within 21 days of their work anniversary.
Importantly, you cannot change a casual employee’s hours of work or terminate their employment to avoid casual conversion.
What will this change to employment law mean to your business?
- For businesses with more than 15 staff, you will need to start offering casual conversion to all eligible staff. However, the reality is most won’t want to convert because their pay will reduce to permanent employee rates.
- Eligible casual staff will be able to ask you to convert their employment status to permanent. If you don’t want to, you need to have sound reasons for refusing their request and we recommend speaking to us before you act.
Fair Work legislation is rapidly changing
For the past couple of years, there have been significant changes to Fair Work laws and it’s been difficult for many businesses to keep up. But that’s not a defence against a fair work claim. To ensure your business continues to be a compliant employer, request a HR Health Check to identify any possible issues.