Strings attached - the new era of casual employment
With the raft of legislative changes to casual employment, many employers are asking themselves if there is any point in engaging employees on a casual basis?
Read more...A number of amendments were made to the Fair Work Act 2009 (Cth) (FW Act) which commenced on 26 August 2024.
A brief summary of the changes are set out below for those who may have missed them.
1. Casual employment and casual conversion
The definition of who is considered a casual employee has changed. For an employee to be considered a casual employee there must be:
- no firm advance commitment to ongoing work; and
- entitlement to casual loading or a specific casual pay rate in a modern award, registered agreement, or employment contract.
The focus is now on the employment relationship and whether it can be characterised as one in which there is a firm advance commitment to continuing indefinite work.
The casual conversion process has been updated to introduce a new ‘Employee Choice Pathway’ for employees to notify their employer by writing of their intention to change to permanent employment and lists the only reasons that an employer may refuse conversion. This replaces the previous casual conversion process which required employers to make an offer to convert to ongoing employment if the casual employee met certain conditions.
Employers must also now provide all casual employees with the Casual Employment Information Statement (available here) at the following times:
- before, or as soon as possible after, commencement of employment; and
- at twelve months of employment for small business employers; or
- at six months, at twelve months, and then after every twelve months of employment for other employers.
There are now new protections for casual employees against sham arrangements if an employer:
- dismisses, or threatens to dismiss an employee in order engage them as a casual employee to perform the same, or substantially the same work; or
- knowingly makes a false statement to an individual (whether a current or former employee) to persuade or influence them to enter into a contract for casual employment to perform the same, or substantially the same work.
The maximum penalties for contraventions of the FW Act relating to sham casual employee arrangements are now:
- $93,900 for individuals; and
- $469,500 for businesses.
2. Right to disconnect
Employees now have the right to refuse to read or respond to contact from an employer or an employment-related third party outside of work hours, unless doing so would be unreasonable.
The following factors are to be taken into account to determine whether the refusal was unreasonable:
- the reason for the contact;
- how the contact is made and how disruptive it is to the employee;
- how much the employee is compensated or paid extra for:
- being available to perform work during the period they are contacted, or
- working additional hours outside their ordinary hours of work
- the employee’s role in the business and level of responsibility; and
- the employee’s personal circumstances, including family or caring responsibilities.
This right will be available to employees of small business employers from 26 August 2025.
3. Independent contractors
The way that the court determines who is an independent contractor has changed.
Section 15AA of the FW Act now provides that the ordinary meanings of 'employee' and 'employer' will be determined by the real substance and true nature of the relationship between the parties. This “whole of relationship test” will consider the totality of the relationship between the individual and the person including the terms of the contract and how the contract is performed.
Independent contractors who earn above the contractor high income threshold (which has been set to $175,000) can ‘opt out’ of using the whole relationship test by giving their hirer written notice. By opting out, this will mean that the relationship between the parties will be determined on what was agreed at the start of the relationship.
An independent contractor can now apply to the Fair Work Commission (FWC) if they believe their contract contains unfair contract terms and the FWC has the power to set aside, amend or vary them.
4. Regulated workers and road transport industry workers
‘Employee-like workers’ in the gig economy and contractors in the road transport industry will have access to minimum standards and dispute resolution with the FWC. Workplace delegates’ rights have been extended to these regulated workers.
Registered employee organisations will also be able to make collective agreements with digital labour platform operators and road transport businesses.
Information provided in this news alert is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this news alert, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.
