Amendments to the Fair Work Act 2009 (Cth) (FW Act) over time have reshaped the nature and management of the casual employment relationship.
The most recent amendments in August 2024 serve as an important reminder to employers about the need to actively manage casual employment arrangements and carefully consider whether it is appropriate to engage employees on a casual basis.
Our Managing Director and Principal, Athena Koelmeyer recently presented a webinar on navigating these legislative changes and provided some useful insights on how employers can manage this new era of casual employment.
Engaging casual employees – why and how?
Casual employees should be engaged to perform ad hoc work on a temporary, short-term and as needed basis.
Section 15A of the FW Act now includes a “general rule” which is to be used when determining whether an employee is a casual employee. It states that an employee will be a casual employee only if:
(a) the employment relationship is characterised by an “absence of a firm advance commitment of continuing and indefinite work”; and
(b) the employee is entitled to a casual loading or specific rate of pay for a casual employee prescribed by a modern award, enterprise agreement or employment contract.
The FW Act sets out a variety of factors which are to be assessed in considering whether there is an “absence of a firm advance commitment to continuing and indefinite work”. Most importantly, the assessment now requires consideration of the real substance, practical reality and true nature of the employment relationship.
This means that, when engaging a casual employee, employers must:
o be offered work on an as needed basis;
o be free to accept or reject work; and
o not be rostered to perform regular or fixed hours of work.
Casual conversation and the new “employee choice” pathway under the FW Act
The casual conversion provisions under the FW Act were amended on 26 August 2024 to a new “employee choice” pathway. For small business employers, these provisions commence on 26 August 2025.
Under these changes, casual employees who have worked for at least six months (or 12 months for a small business employer) are able to notify their employer if they no longer believe that they fall within the definition of a casual employee under the FW Act.
This is different from the previous casual conversation provisions which required employers to offer a casual employee conversion to permanent employment after a prescribed period.
The FW Act sets out certain requirements for responding to “employee choice” notifications.
Termination of casual employment and other risks
Employers should be mindful that the concept of not having “a firm advance commitment to continuing or indefinite work” does not necessarily mean that a casual employee can be terminated at will.
Casual employees may be entitled to make claims including unfair dismissal, adverse action and discrimination (under both the FW Act and anti-discrimination legislation).
This is why it is important for employers to carefully manage the exit of casual employees, particularly in circumstances where it decides to “offboard” a casual who is no longer required or update its database to remove “inactive” casuals.
If you would like to discuss the changes to casual employment and how your business should engage casual employees, please reach out to us via your usual team contact. For new clients, please call our Client Engagement Manager, Annette Martin on (02) 9256 7500.
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.
