On 27 March 2021, the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 came into effect, amending the operation of casual employment under the Fair Work Act 2009 (Cth) (Fair Work Act).
Summary of Recent Changes
Recent changes to the Fair Work Act have:
- created a statutory definition of what constitutes a casual employee;
- required employers to provide casual employees with the Casual Employment Information Statement;
- obliged employers to offer casual conversion (more below) unless reasonable grounds exist to not make such an offer;
- created the right for employees to request casual conversion;
- made offers and requests for casual conversion form part of the National Employment Standards;
- provided protection to employees by preventing employers in reducing or varying an employee’s hours of work or terminating an employee’s employment in order to avoid any right or obligations which exist under Division 4A—Offers and requests for casual conversion;
- provided the ability to set off casual loadings in underpayment claims if it is found that the employee was not a casual employee; and
- created the ability to initiate disputes for casual conversion refusals.
Definition of Casual Employee under the Fair Work Act
Section 15A of the Fair Work Act provides the definition of a casual employee. A person will be a casual employee if;
- an offer of employment is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work;
- the offer is accepted on that basis; and
- the person is an employee as a result of that acceptance.
In determining whether no firm advance commitment to continuing and indefinite work, regard will be had to:
- whether the employer can elect to offer work and whether the person can elect to accept or reject work;
- whether the person will work as required according to the needs of the employer;
- whether the employment is described as casual employment; and
- whether the person will be entitled to a casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument.
This assessment is made at the time of offer and acceptance. It does not have regard to the subsequent conduct of the parties.
Offers Casual Conversion
Casual conversion occurs where a casual employee becomes a full-time or part-time employee.
Under section 66B of the Fair Work Act, employers, who are not small business employers, are required to offer casual conversion to casual employees where:
- the employee has been employed by the employer for a period of 12 months beginning the day the employment started; and
- during the last 6 months, the employee has worked a regular pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to work as a full‑time employee or a part‑time employee (as the case may be).
Such offers for casual conversion must be in writing. They must be made within 21 days after the end of the 12 month period from the date the employment started. The employee must give the employer a written response to the offer within 21 days after the offer is given. This written response must state whether the employee accepts or declines the offer.
Exceptions to Making a Casual Conversion Offer
An employer is not required to make an offer for casual conversion however if there are reasonable business grounds to not make the offer and the reasonable grounds are based on facts that are known, or reasonably foreseeable, at the time of deciding not to make the offer. If such a decision is made, written notice must still be given to the employee noting the reasons for not making the offer. Such notice must be given within the 21 days after the end of the 12 month period from the day the employment started.
Reasonable grounds for deciding not to make an offer for casual conversion include:
- the employee’s position will cease to exist in the period of 12 months after the time of deciding not to make the offer;
- the hours of work which the employee is required to perform will be significantly reduced in that period;
- there will be a significant change in either the days or times which the employee is required to perform work in that period, which cannot be accommodated within the days or times the employee is available to work during that period;
- making the offer would not comply with a recruitment or selection process required by or under a law of the Commonwealth or a State or a Territory.
Right to Request Casual Conversion
Under section 66F of the Fair Work Act, a casual employee may request for casual conversion if:
- they have been employed by the employer for a period of at least 12 months beginning the day the employment started;
- they have in the 6 months ending the day the request is given worked a regular pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to work as a full‑time employee or a part‑time employee;
- they have not refused an offer made under section 66B in the 6 months ending the day the request is given;
- the employer has not given the employee notice that it will not make an offer for casual conversion in the 6 months ending the day the request is given; and
- the employer has not given a response refusing a previous request made under s 66F in the 6 months ending the day the request is given.
Such requests for casual conversion must be in writing and be given to the employer. The employer must give the employee a written response to the request within 21 days after the request is given stating whether the employer grants or refuses the request.
The employer must not refuse the request unless the employer has consulted the employee, there are reasonable grounds to refuse the request, and the reasonable grounds are based on facts that are known, or reasonably foreseeable, at the time of refusing the request.
Set-off of Casual Loadings
Where court proceedings find that an employee was incorrectly paid when they were a casual as they should have been a part-time or full-time employee, the court can reduce any amounts which the employee is entitled to by considering the casual loading amounts already paid by the employer to compensate for those entitlements.
Section 545A provides that if person makes a claim to be paid annual leave, personal/carer’s leave, public holiday pay, payment in lieu of notice of termination or redundancy pay entitlements where they were employed as a casual and paid an applicable casual loading, the court must reduce any amount payable by the employer for those entitlements by an amount equal to the loading amount or the proportion which it considers appropriate.
Connection to General Protections matters
Section 66L provides protection to employees from adverse action due to their casual conversion rights. This section prevents employers in reducing or varying an employee’s hours of work or terminating an employee’s employment in order to avoid any right or obligations which exist under Division 4A—Offers and requests for casual conversion. Employees are still also able to rely upon the general protections provision of the Fair Work Act if they are subject to adverse action by their employer as a result of the rights to casual conversion.
Casual Conversion Disputes
Under section 66M, if a dispute exists between an employer and employee about casual conversion, the employer and employee must first try to resolve the matter at a workplace level. If discussions at the workplace level do not resolve the dispute, a party to the dispute may then refer the dispute to the Fair Work Commission.
Section 66M does not apply, however, if a fair work instrument that applies to the employee, the employee’s contract of employment, or another written agreement between the employer and employee, includes a term that provides a procedure for dealing with the dispute.
For assistance with casual conversion, or for more information, contact us.
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