Starting 26 August 2024, new regulations regarding casual employment will take effect under the Closing Loopholes (No 2) Amendments. It’s crucial for all employers, especially those with casual staff, to familiarise themselves with the updated obligations outlined in the Fair Work Act 2009 (Cth) (Act).

Revised Definition of Casual Employment

The Act introduces a new definition of casual employment, specifying that an employee is considered casual if:

• There is no firm, advance commitment to ongoing, indefinite work; and
• The employee receives casual loading or a designated casual pay rate.

When assessing whether there is a firm, advance commitment to ongoing work, the real substance, practical reality, and true nature of the employment relationship will be considered. Key factors include:

• whether the employer can choose to offer work to the employee;
• whether the employee can accept or decline work offers from the employer;
• the likelihood of future availability of similar work for the employee;
• whether full-time or part-time employees perform the same or similar tasks; and
• whether the employee has a consistent work pattern.

Introduction of the Employee Choice Framework

The obligation for employers to offer casual employees the option to convert to permanent employment will be removed. Instead, the Act introduces a new Employee Choice Framework.

This new framework applies to casual employees hired on or after 26 August 2024. Casual conversion rules currently in place will still apply to those employed before this date until 26 February 2025. However, small business employees will continue under the existing rules until 26 August 2025. Importantly, employers will not be required to offer casual conversion after 26 August 2024.

Under this framework, casual employees who have worked for 6 months (or 12 months in a small business) and believe they no longer qualify as casual can request conversion to permanent status by submitting a written notice to their employer.

Employers must respond in writing within 21 days and are required to approve the request unless there is a valid reason for denial under the Act. Justifiable reasons for rejection might include:

• the employee still meets the definition of a casual employee; or
• there are fair and reasonable operational grounds for rejection, such as significant business reorganisation or disruption.

Disputes over conversion requests can be escalated to the Fair Work Commission (FWC) for mediation or conciliation, with arbitration if unable to be resolved informally.

Casual Employment Information Statement (CEIS) Updates

Employers must continue to provide the CEIS to casual employees either before or as soon as possible after they begin their employment.

Additionally, employers will now be required to provide the CEIS to casual employees at 6 months of employment, then at 12 months, and annually thereafter.

For small business employers, the CEIS must be given at the start of employment and again after 12 months.

New Anti-Avoidance Provisions

New anti-avoidance provisions will be introduced to prevent employers from:

• dismissing or threatening to dismiss a permanent employee to rehire them as a casual for the same or similar work; and
• making false claims to persuade a permanent employee to accept a casual employment contract for the same or substantially the same work.

Courts may impose penalties for breaching these provisions, with maximum penalties being:

• $93,900.00 for individuals; and
• $469,500.00 for businesses.

We emphasise the importance of staying compliant with employment laws and encourage you to seek legal advice if you are unsure of your obligations. The cost of ensuring compliance with the Act, awards, and other legislation can save businesses significant time, money, and stress.

For any questions or concerns about how this new legislation might affect you as an employer or employee, please contact Robert Lamb or John Davies on (07) 3220 1144.