2 August 2024
From 26 August 2024, new legislation will take effect regarding the conversion of casual workers to permanent status. The legislation introduces a revised definition of casual employment and establishes a clear new pathway for casual employees to transition to permanent employment under the employee choice framework. This change reflects the reality that some workers are casual by choice and do not wish to lose casual loading and/or the flexibility associated with casual employment.
These changes address a legal “loophole” that previously allowed some workers to remain classified as casual despite working regular hours. The new provisions aim to provide these workers with access to leave entitlements and increased financial security.
The New Definition of Casual Employment
A new definition of casual employment will be introduced to the Fair Work Act. Under this definition, an employee is only a casual if:
- there isn’t a 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
- they’re entitled to receive a casual loading or specific casual pay rate.
Employees who start as a casual, will stay casual until their employment status changes either through:
- a conversion process or Fair Work Commission order, or
- accepting an alternative employment offer and starting work on that basis.
New Pathways
- Employees will be able to notify their employer of their intention to change to permanent employment if the employee:
- has been employed for 6 months (12 months in a small business).
- Believes they no longer meet the requirements of the new casual employee definition
- Casual employee can write to employer to notify them on request to change. The employer is then required to respond within 21 days.
Reasonable Grounds to Refuse Casual Conversion
- Employee still meets the definition of a casual
- Fair and reasonable operational grounds for not accepting including:
- substantial changes would be required to the way in which work in the employer’s business is organised
- there would be significant impacts on the operation of the employer’s business
- substantial changes to the employee’s employment conditions would be reasonably necessary to ensure the employer doesn’t break any rules (such as in an award or agreement) that would apply to the employee.
- A change of employment status to full-time or part-time would not comply with a recruitment or selection process required by law, such as the Public Service Act 1999, which outlines that casuals cannot convert without a competitive selection process.
Avoidance Penalties
The changes also introduce anti-avoidance penalties for improperly engaging casual workers. Breaches of these provisions can attract civil penalties (up to $93,900 for individuals and $469,500 for body corporates). Employers must NOT:
- dismiss or threaten to dismiss an employee with the plan to re-engage them as casual.
- making false statements to persuade an individual to enter a casual employment contract.
- misrepresenting employment as casual.
How to prepare for these upcoming changes:
- Review regulation changes and update relevant policies, procedures and processes to ensure a smooth transition and compliance.
- Review workforce requirements, the use of casuals and flexibility.
- Be aware that casuals can now request conversion to permanency.
- Considering what grounds (if any) you may have to reject such a request.
- Ensure all changes are communicated with employees.
If you would like more information on how these changes may impact your or your organisation, please contact us via the link below.
