New provisions for casual employees

Introduction

Effective from 27 March 2021, new legislation has come into force which includes four main new amendments affecting casual employees, including:

• a long awaited statutory definition for a casual employee for purpose of the National Employment Standards;
• conversion pathway for casual employees becoming a full time or part time employee;
• provisions for setting off amounts payable by employers against any casual loading paid; and
• a casual employment information statement.

Definition of a casual employee

The legislation defines a casual employee as a person where at the time an offer of employment is made:

• the offer is made on the basis that there is no firm advance commitment to continuing and indefinite work according to an agreed pattern of work; and
• the employee accepts the offer on that basis.

A number of criteria exist in assessing if the offer is on a casual basis including:

• the ability of the employer to elect to offer work and if the employee can accept or reject work;
• if the employee can work as required according to the needs of the employer;
• the description of the employee as a casual employee; and
• if the employee is entitled to a casual loading or specific rate of pay for a casual employee.

Conversion from casual to permanent employee

Employers who are not small business employers (those who engage less than 15 employees) are required to offer their casual employees’ conversion from casual to full time or part time employment (as the case may be) in writing and within 21 days of their 12 month anniversary as an employee where:

• the employee has worked for the employer for a period of 12 months;
• has worked a regular pattern of hours without significant adjustments, for at least the last 6 months of the 12 month period on an ongoing basis; and
• those hours are likely to continue as a permanent employee.

Employees have 21 days in which to respond to the offer in writing. Where an employee fails to respond they are taken to have declined the offer.

Some exemptions and transitional provisions of six months apply.

The Fair Work Commission is required to review the legislation against relevant modern award provisions over the coming months to ensure consistency.

Setting off casual loading

Where an employee has been misclassified as a casual employee, a relevant court may offset any casual loading amounts against an employee’s claim for entitlements under the National Employment Standards – that is any claim in relation to:

• paid annual leave;
• paid personal/carer’s leave;
• paid compassionate leave;
• payment for absence on a public holiday;
• payment in lieu of notice of termination of employment; or
• redundancy pay.

A Casual Employment Information Statement

Employers are now required to provide employees a Casual Employment Information Statement before or as soon as practicable after the employee starts work as a casual.

A copy of the Casual Employment Information Statement can be found here:

https://www.fairwork.gov.au/employee-entitlements/national-employment-standards/casual-employment-information-statement

Recommended next steps for employers

Employers should:

• review and update their contracts of employment to reflect the new provisions;
• review on-boarding policies and procedures including flagging processes for when casual employees become entitled to transfer to permanent full time and part time employment, addressing offers and requests for casual conversion;
• provide the Casual Employment Information Statement to casual employees as required; and
• undertake an assessment of existing casual employment period within the six month transition period.

If you would like to know more or if we can assist in providing advice on the next steps including identifying which employees are subject to the transitional provisions, please call or email 02 4861 2345 or [email protected].

Please note this blog is general in nature and for information purposes only and should not be relied on for legal advice. Should you require advice regarding the information in this email please contact us so we may provide advice specific to your needs and circumstances.