We have some very important news about all the recent changes to casual employment. If you currently employ long term or short-term casuals in your business then you need to pay attention!
And yes, we know the past year has been pretty tough, so we are sorry to drop this bomb on you, but you need to know that all the recent changes to the way in which we engage casual employees have just got even tougher.
Back in May, we sent you some advice around all the changes to casual employment and what you needed to know. To recap you can check out our blog right here.
But we know that most of you are pretty busy and probably only want the headlines, so here are the most important points for you to ponder again 👇
The new definition of casual employment
The definition of casuals changed from 27 March 2021, and employees are now only considered casual if:
- they are offered a job
- the employer makes no firm, advance commitment that the work will continue indefinitely, with an agreed pattern of work.
- the employee accepts the offer knowing that there is no firm advance commitment and become an employee
- whether the employee is a casual is assessed at the time they are offered and accept the job
- there is no firm advance commitment of work
To work out if an employer has made no firm advance commitment when offering an employee a job, only 4 factors are to be considered. They are whether:
- the employer can choose to offer the employee work and the employee’s choice whether to work or not
- the employee will only be offered work when the employer needs them to work
- the employment is described as casual (this should be in a contract of employment with a very tight clause to cover this new definition)
- employees are paid a casual loading or a specific pay rate for casual employees
- a regular pattern of work doesn’t automatically mean the employee is permanent (full-time or part-time)
Changes to overtime calculations for casuals
Changes to how overtime is calculated were announced based on Award coverage and three methods were implemented. You can read more about this in our comprehensive blog.
Rules around conversions to permanent employment were announced
This is probably the most important change and process that you need to get your head around. Essentially we know that casuals have the right to request conversion to permanent employment if they have been employed by you for greater than 12 months. But now we know that all existing casual employees will have this right and you have until the 27th of September to make an offer. This is going to significantly change the landscape and advice around casuals for many businesses.
But what about small business employers?
Small business employers don’t have to offer to convert their casual employees to permanent employment.
BUT an eligible casual employee working for a small business employer can request to convert to permanent employment at any time on or after their 12 month anniversary. See Employees requesting casual conversion for eligibility information.
Existing casuals working for a small business employer on 27 March 2021 can also make a request to convert to permanent at any time from 27 March 2021, if they are eligible. See Requests by existing casual employees for details and eligibility information.
To respond to an employee’s request to convert to permanent, employers need to write to them within 21 days and tell the employee if they have or haven’t accepted their request. If the employer refuses the request, they have to tell the employee their reasons why in their written response. Employers can’t refuse a request unless they have consulted the employee and have reasonable grounds to refuse the request. See Reasonable grounds for not making an offer or refusing a request for further information.
What if my business cannot or does not want to offer a casual employee permanent employment?
Employers have the right not to offer employees casual employment or to deny requests for conversion but you need to go through the following process. For existing casual employees, if they have been with your business before the 27th March 2021 they are eligible to be offered to convert to permanent employment. You have until the 27th September 2021 to write to your employees to either:
- Make a written offer to convert their casual employment status to permanent; this can be done using our letter template. Please note, employees have the right to not accept this conversion and can opt to remain casual. We advise getting this confirmed in writing
- Or write to their employees explaining the reasons why you will not be making an offer of conversion. You need to outline the reasons and these must be covered under reasonable business grounds
Employees also have the right to request conversion at any time after 12 months. You have 21 days to respond to these requests in writing. You need to be careful when doing this, as you do not want to incriminate your business by unknowingly breaching the FWA. Don’t worry we can assist.
Our advice is that you need to consult with your employees around these changes, and we recommend doing 1:1 meetings with all your casual employees and keeping records of these consultation meetings.
You also need to update your casual contracts of employment to include wording around the new definitions. Essentially it is critical that you have a look at all your casual employees and determine if they really meet the definition of casual. Is there an expectation of ongoing work? Do they work on a roster, or get their hours in advance? Do they have set days or hours of work? If so, then they are no longer a casual under the definition within the FWA.
Breaches of the FWA carry penalties of up to $66k per breach so you do not want to get caught out around these changes.
We know this is really complicated and we are happy to help! We have created some letter templates to assist you to manage this and are offering them free right here.
The letters we have created are:
- Letter to offer conversion from casual to permanent
- Letter to advise that you will not be offering conversion
We are offering them as a free download. All you need to do is complete this form.
Be aware that you will need to go through this same process for all your casuals who were not employed prior to the 27th of March, within 21 days of their 12 month anniversary with you.
We also have letters for what to do when employees request conversion and you don’t or can’t approve these requests, it’s pretty complicated, and if you need support around this we recommend reaching out. We would happy to assist you to execute a plan of attack. (You don’t want to get this one wrong!)