Casual Employment Changes from 26 August 2024
Casual employment was first defined in the Fair Work Act in 2021 as employment lacking an advance commitment to an ongoing pattern of work. The contract of employment is central to determining whether there was an advance commitment to an ongoing pattern of work under this definition. The amendments at the time also introduced a casual conversion mechanism triggered at the employee’s 12-month anniversary. However, the definition, relevant characteristics and conversion rights of casual employment are set to change again from 26 August 2024.
The New Definition
An employee is only a casual employee if there is:
no firm advance commitment to continuing and indefinite work; and
a casual loading or a specific rate of pay for casuals under a modern award, enterprise agreement or an employment contract.
Advance COmmitment
The new definition also changes the test for determining whether there is an advance commitment, removing the central focus on the contents of an employment contract. Instead, employers and employees need to consider the real substance, practical reality and true nature of the employment relationship.
An overall assessment of whether a firm advance commitment to continuing and indefinite work exists must contemplate whether:
the employer can choose to offer or not offer work and the employee can choose to accept or reject work - and whether this actually happens;
it is likely that there will be future continuing work available, considering the nature of the business;
permanent employees perform the same kind of work that the employee usually performs; and
the employee performs a regular pattern of work.
Employee Choice Pathway to Casual Conversion
Casual employees will remain casual unless they convert under one of the pathways. From 26 February 2025, a new casual conversion option will become available via the employee choice pathway (26 August 2025 for small business employers).
Casual employees who wish to convert must commence the process under the employee choice pathway by notifying their employer that they wish to become a permanent employee. However, they must:
have at least six months of service (or 12 months with small business employers);
believe that they no longer meet the definition of a casual employee;
not be in an active dispute about casual conversion; and
not have been involved in certain other casual conversion-related events in the prior six months.
Employers must respond to such notifications within 21 days. The employee becomes a permanent employee where the employer accepts the notification.
The grounds for an employer to refuse include:
the employment still meets the definition of casual employment;
fair and reasonable operational grounds; or
to avoid non-compliance with a recruitment or selection process required by law.
Changes to Casual Conversion Disputes
The Fair Work Commission has powers to deal with casual conversion disputes, but it may only arbitrate such a dispute where both parties agree.
However, the new laws will allow the Fair Work Commission to arbitrate all disputes involving casual conversion via the employee choice pathway.
