There are multiple key changes that redefine how employers engage with causal employees that will take effect on 26 August 2024. The main changes include:

A new definition of ‘casual employee’
A new pathway from casual employment to permanent employment (casual conversion)

The change in the definition of ‘casual employee’

A new definition of ‘casual employee’ will be introduced to the Fair Work Act, where an employee is only casual if:

there is no ‘firm advance commitment to continuing and indefinite work’ taking into account a number of factors, including the real substance, practical reality and true nature of the employment relationship; and
the employee is entitled to casual loading or a specific rate of pay for casual employees.

When evaluating whether there is ‘firm advance commitment to continuing and indefinite work’, the focus will be on the real substance, practical reality and true nature of the employment of the relationship, while also considering a non-exhaustive list of factors such as:

whether the employee can choose to accept or reject work;
whether the employer can choose to offer work to the employee;
the likelihood of available future work to the employer’s business, based on the nature of the business;
whether there are other full-time or part-time employees performing the same work; and
whether there is a regular pattern of work for the employee.

If all the above criteria are met, it is likely that the true nature of the work arrangement is in fact not casual in nature. In this case, the employee would be eligible to convert to a permanent or permanent part time position within the organisation.

The pathway to permanent employment (Casual Conversion)

The amendments introduced a new employee-driven pathway for eligible employees to change their employment status to a permanent one by notifying their employer their intention to change their employment status if the employee:

has been employed for at least 6 months (12 months if working for a small business employer due to take effect in 26 February 2025); and
believes they no longer meet the requirements of the new causal employee definition.
However, it should be noted that employees cannot provide this notification for casual conversion if:
- they are currently engaged in an ongoing dispute with their employer about conversion; or
- In the last 6 months, their employer has refused a previous notification, or they have resolved a dispute with their employer about casual conversion.

Employers must then consult with the employee before responding to the casual conversion notification. Then, the employer must respond in writing to either accept or refuse the change within 21 days after receiving the notification.

If the change is accepted, the employer must respond by including the new employment status, the new work hours and when the change will take effect.

On the other hand, if the change is refused, the employer must provide the reasons for the refusal. The grounds for refusal may be:

the employee still meets the new definition of the ‘casual employee’；or
there are fair and reasonable operational grounds for not accepting the notification; or
accepting the casual conversion would mean that the employer would not be complying with a recruitment or selection process required by law.

Casual Employment Information Statement (CEIS)

From 26 August 2024 onwards, the CEIS will need to be provided by employers to:

new employees before, or as soon as possible after, the start of their employment;
all casual employees employed by non-small business as soon as possible after,
- 6 months of employment;
- 12 months of employment; and
- Every subsequent 12 months of employment.
All casual employees of small businesses as soon as possible after 12 months of employment.

Next steps for employers

With changes to casual employment taking effect on 26 August 2024 (or 26 February 2025 for small businesses with fewer than 15 employees), it is crucial that employers have a clear understanding of what the changes mean to comply with the new rules.

It is critical for employers to review and identify their employees’ status in accordance with the new definition and ensure that the written employment contracts reflect the changes in legislation.

For assistance in navigating these changes, please do not hesitate to contact us.

Verge Legal provides legal advice in all states in Australia, contact us today if you need assistance.

This blog post provides general information and is not intended as legal advice. It may not be complete or up-to-date. For specific legal advice, please consult a qualified lawyer.