Casual Employees – Proposed New Changes

Last month, the Federal Government introduced new legislation (Proposed Law) that, if passed, will permit casual employees to request conversion to full-time or part-time employment after 6-months. This is in contrast to the current 12-months.

As well as changing the assessment period, the Proposed Law looks to replace the old definition of casual employment to include an entitlement to casual loading and also redefines what is meant by the phrase “an absence of a firm advance commitment to continuing and indefinite work” with reference to:

• the actual employment relationship;
• the employment contract (or mutual understand or expectation between employee and employer);
• the employer’s ability to offer work;
• the nature of the business;
• whether there are already full-time or part-time employees performing the same work; and
• whether there is a regular patterns of work for the casual employee.

Employers with casual workers should consider whether any of the above factors apply to their staff. If a casual worker is engaged in a pattern of work consistent with full-time or part-time employment, or non-casual employees are performing the same work, then they may have the option to activate the conversion obligations. Casuals should keep in mind they will give up their casual loading entitlement in return for leave and other entitlements enjoyed by full-time employees.

What does this mean for employers if the Proposed Law is passed?

If an employee has made a request, an employer will have 21 days to accept or reject the conversion. Where an employer cannot, on reasonable grounds, offer similar hours to the casual employee as they had worked during the 6 months assessment period, the employer is exempt from complying with the casual conversion obligations under the Fair Work Act and may reject the request for conversion from the eligible employee in writing.

To avoid such an issue arising, employers should properly consider their casual employment contracts to ensure that they are clearly identifying patters of work, shifts and payment for loading. However, employers should be careful about deliberately avoiding their obligations to convert eligible casual employees or they could find themselves penalised for misrepresentation of employment.

Small businesses who were previously exempt from these conversion obligations will now also have an assessment period of 12 months. A fact sheet has been prepared to assist small business with their obligations.

How we can help

Our Corporate & Commercial team is available to assist with any questions you may have. Please email us your enquiry.