Despite early news of significant changes to the Fair Work Act, on 23 March 2021 both houses of Parliament passed a stripped back version of the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2021 – the ‘IR Omnibus Bill’.
The Government retained only Schedule 1 of the Bill, which addresses changes to casual employment.
Changes to Casual Employment
The IR Omnibus Bill made four key amendments to the Fair Work Act 2009:
- The inclusion of a definition for a ‘casual employee’.
- Where an employee has been wrongly classified as a casual, employers will be able to offset any entitlements retrospectively claimed by the employee against the 25% casual loading that they have already paid to the employee.
- Casual employees have extended rights in relation to conversion from casual to permanent employment after 12 months continuous service..
- Employers are required to provide their casual employees with a Casual Employment Information Statement, which will be prepared by the Fair Work Ombudsman.
New definition of Casual Employee
The meaning of ‘casual employee’ will now be defined under section 15A of the FW Act. A person is considered a casual employee if:
- ‘an offer of employment is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work; and
- the person accepts the offer on that basis; and
- the person is an employee as a result of that acceptance.’
The general effect of the definition is that an employee will be considered a casual employee if there was no advance commitment to continuous work for an indefinite period of time. Further, a regular pattern of hours does not in itself dictate a firm advance commitment to continuing and indefinite work.
Whether an employee is considered to be a casual employee will be based on the offer and acceptance of employment. A casual employee will remain a casual employee until they are either converted to a permanent role, or they accept an alternative employment offer.
Offset of entitlements against casual loading
Employers will now be able to offset against casual loading already paid.
Extended rights around casual conversion
An employer must now offer a casual employee conversion to a full-time or part-time role (depending on the hours they have worked) if:
- they have been employed for a 12 month period; and
- in the last 6 months of that employment, they have worked: i)a regular pattern of hours on an ongoing basis; and ii) the employee could continue to work this pattern of hours as a part-time or full-time employee, without significant adjustment..
Small businesses, being businesses with 15 or fewer employees, will be exempt from having to offer conversion after 12 months. However, their employees can still make a request for casual conversion.
An employer is not required to make an offer for casual conversion if:
- there are reasonable business grounds not to make that offer; and
- ‘reasonable grounds’ are based on facts that are known or reasonably foreseeable.
‘Reasonable Grounds’ include:
- whether the employee’s position will cease to exist in the following 12 months;
- the hours of work will be significantly reduced;
- there will be a significant change in the days or times that the employee hours of work are required and the employee cannot make themselves available to work these days / times; and
The offer of conversion must be made in writing to the employee within the 21 days following their 12 months of employment and must reflect the hours that they have worked. A casual employee then has 21 days to accept or reject the offer. An failure to respond within 21 days is taken to mean that the employee has rejected the offer.
An employee’s right to request casual conversion
In addition to an employer’s obligation to offer casual conversion, an employee will have a right to request, in writing, casual conversion if they satisfy the eligibility discussed above, and:
- they have not refused an offer for casual conversion in the past 6 months; and
- the employer has not given them notice that they have decided not to convert based on reasonable business grounds; and
- the employer has not refused a previous request; and
- the request has not been made within the 21 days after the employer has made an offer pursuant to the 12-month-offer requirement.
An employer will have 21 days to provide a written response either accepting or declining the request.
Requirement for Casual Employment Information Statement
Employers will be required to provide casual employees with a ‘casual employment information statement’ either before, or as soon as practicable after they commence employment. The information statement will be prepared by the Fair Work Ombudsman.
Link to Casual Employment Information Statement:
Casual Employment Information Statement (fairwork.gov.au)