From 26 August 2024, a new definition of ‘casual employee’ will be introduced to the Fair Work Act. Under this definition, an employee is only a casual if:

  • There is not a firm advance commitment to continuing and indefinite work, considering several factors, including the real substance, practical reality, and true nature of the employment relationship.
  • They are 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, Fair Work Commission (FWC) order, or accepting an alternative employment offer and starting work on that basis.

Employees who were employed casually before 26 August 2024 will stay casuals under the new definition unless transitioning to permanent employment.

Firm advance commitment

Whether there is a firm advance commitment to continuing and indefinite work needs to be assessed on the real substance, practical reality, and true nature of the employment relationship. Additionally, other factors will be looked at including whether:

  • The employer can offer or not offer work to the employee (and whether this is happening), whether the employee can accept or reject work.
  • It is reasonably likely there will be future work available to the employer’s business, based on the nature of the business.
  • There are full-time or part-time employees performing the same kind of work in the employer’s business as the work the employee usually performs.
  • The employee has a regular pattern of work.

Fixed term contracts

Casual employees can generally be hired on fixed term contracts. However, an employee can not be engaged as a casual on a fixed term contract when a member of the academic or higher education teaching staff of a higher education institution; are not a state public sector employee; and are covered by the Higher Education Academic Staff Award, or Higher Education General Staff Award.

Changing from casual to permanent employment (casual conversion)

A new pathway will be introduced for eligible employees to change to permanent employment when requested, replacing the current rules. Employees will be able to notify a business if intending to change to permanent employment if:

  • Employed for at least 6 months (or 12 months if working for a small business employer).
  • The belief is that the new casual employee definition is no longer met.

Employees can not notify an employer of the intention to change to permanent employment when currently engaged in an ongoing dispute regarding casual conversion, or if in the last 6 months the employer refused a previous notification or a casual conversion dispute has been resolved.

Employers responding to a casual conversion notification

Before responding, the employer must consult with the employee. This includes discussing certain details of what will change if the employer accepts the notification and the employee is no longer a casual employee. A notification is the written notice an employee gives to an employer to convert to permanent employment. The employer must respond in writing to the employee within 21 days of the employee giving the notification, either accepting the change, or refusing the change.

Accepting the change

If the employer accepts the change, the response must include information regarding what the new employment status will be (i.e. part-time or full-time), the employee’s new hours of work, and when the change will take effect.

Refusing the change

If refusing the change, the response from the employer must include the reasons for the refusal. Acceptable reasons for refusing the change are if the employee still meets the definition of a casual or if there are fair and reasonable operational grounds for not accepting the notification.

Important considerations are whether substantial changes would be required to the way in which work in the business is organised; if there would be significant impacts on the operation of the business; if substantial changes to the employee’s employment conditions would be needed to ensure the employer doesn’t break any rules (such as in an award or agreement) applicable to the employee; or if accepting the change means the employer is not complying with a recruitment or selection process required by law.

Disputes about casual conversion

If a dispute arises and cannot be resolved at the workplace level, the dispute can be heard by the FWC. The FWC would generally first try to resolve the dispute in an informal way including by mediation or conciliation. If the dispute still is not resolved, the FWC is able to arbitrate the dispute. This is a more formal process and can result in a legally binding decision.

If you need support to understand the upcoming changes surrounding casual employees and conversion, get in touch with our team or give us a call on 08 6150 0043. Find our articles helpful? Remember to follow us on Facebook, Instagram or LinkedIn to keep up to date with our practical tips and information for business owners and managers.