From 26 August, the Government’s closing loopholes legislation sees important changes to casual employment. The changes amend the definition of a casual employee, introduces an additional requirement in relation to the Casual Employment Information Statement (CEIS), and introduces an employee choice framework.

What are the key changes?

Casual Employee Definition

A new definition for ‘casual employee’ will be introduced which wil outline that an employee is only a casual where:

  • There is no firm advance commitment to continuing and indefinite work, considering a number of factors, including the real substance, practical reality, and true nature of the employment relationship, and
  • They are entitled to receive casual loading or a specific casual pay rate.

It is important to note that the changes mean that there is no single determinative factor such as what the employment contract says, with the focus shifting to the nature of the employment arrangement.

Employee Choice

Casual employees will have the right to request to convert to a permanent employee after 6 months instead of 12 months. For small businesses, casual employees will have the right to request to convert to a permanent employee after 12 months from 26 February 2025.

Casual employees can only make a written request if:

  • Employed for at least 6 months (or 12 months if working for a small business employer), and
  • Believe the employment relationship no longer meets the requirement of the new casual employee definition.

Employees cannot request to change to permanent employment if:

  • Currently engaged in an ongoing dispute with their employer about conversion,
  • The employee has had a previous request refused by their employer in the last 6 months, or
  • The employee has resolved a dispute with their employee about casual conversion.

Once a request is made, employers must give an employee a written response within 21 days, and consult with the employee before responding.

If accepting the change, the employer must provide a response including information on when the change will take effect, covering off whether the employee will be part-time or full-time and the new hours of work.

If refusing the changes, the employer must provide a written response outlining reasons for the refusal. The employer can only refuse a request if under the new casual employment definition, the employee’s current relationship still falls under this new definition, and there are fair and reasonable operational grounds including:

  • Substantial changes would be required to the business,
  • Significant impact on the business,
  • Substantial changes to the employee’s employment conditions would be reasonably necessary to ensure the employer does not breach any rules such as in an award or agreement applicable to an employee, or
  • Accepting the conversion to permanent employment would mean that the employer would not be complying with a recruitment or selection process required by law.

It is important to note that employers will not be required to back-pay employees for any entitlements gained by moving to permanent employment.

Casual Employment Information Statement (CEIS)

The CEIS will need to be provided to:

  • New casual employees before, or as soon as possible after, they start their casual employment,
  • All casual employees as soon as possible after 6 months of employment, 12 months of employment, and every subsequent 12 months of employment, and
  • All casual employees of small businesses as soon as possible after 12 months of employment.

What does this means for employers?

The employee choice framework sees a shift in responsibility from employers to employees. However, employers should be careful not to classify employees incorrectly and pay attention to post casual employment conduct in considering whether the casual employment could now potentially be a permanent one. Employers must also respond to an employee’s request in line with the changes.

Employers are still required to fulfil their current obligations to offer conversion to casual employment up to and including 25 August 2024. Additionally, employers should ensure that the CEIS is included during the process of onboarding a new casual employee.

If you currently employ or plan to hire casual workers, it is crucial to revise your policies and strategies to align with these changes. These reforms establish a clear pathway for employees to transition from casual to permanent status under the Act, and understanding the practical aspects of employment relationships beyond contractual terms for casual employees is key. If you need help navigating how these changes impact your business, get in touch with our team today.

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