Major changes to casual employment

From 26 August 2024, changes to casual employment will come into effect for businesses who employ 15 or more people. If the business employs less than 15 people, the changes will come into effect on 26 August 2025.

In this week’s Akyra blog, we examine what these changes mean – and next steps for employers.

Re-framing casual employment

Currently, a person is a casual employee if their employer makes ‘no firm advance commitment to continuing and indefinite work according to an agreed pattern of work’.

From 26 August 2024, Closing the Loopholes changes the definition of the term ‘casual employee’ and removes the requirement for ‘continuing and indefinite work’ to ‘an agreed pattern of work’.

As a result, deciding whether an employee is casual or not will no longer be fixed to the point where the employment agreement / contract is offered and accepted. Employers will need to consider what is the ‘real substance, practical reality and true nature of the employment relationship’.

Determining whether this criterion is fulfilled when the employment relationship commences is a key change to the employment relationship.

Where an employee has been engaged as casual before 26 August 2024 (or 26 August 2025 for businesses with fewer than 15 employees), they can make a request for casual conversion under the existing legislation at six months following the changes coming into effect (or 12 months for employees of a small business).

Introducing casual employee conversion notifications

Where an employee is covered by an Award, employers currently have an obligation to offer permanent employment to casual employees who have completed a minimum of 12 months employment with the employer, provided certain criteria have been met.

From 26 August 2024, casual employees can advise their employer through a ‘casual employee choice notification‘ after working a minimum period of six months in accordance with criteria (or 12 months if they work for a small business).

Where an employee makes a request to convert from casual employment to permanent employment, the employer must respond to this request within 21 days in writing whether the request has been accepted or rejected. During those 21 days, the employer is to consult with the employee before responding to the notification.

Employers will be able to refuse a request for casual conversion on fair and reasonable operational grounds:

• where converting a casual employee to a permanent status would cause significant disruption to the business operations or
• substantial changes would be required to the way in which the employer’s work is organised or
• there is an absence of a firm advance commitment to continuing and indefinite (i.e. they still fall within the new definition of a casual employee)..

If an employer refuses the casual employee request for conversion to permanent employment, they must provide a written statement to the employee giving reasons for that decision.

This change in legislation shifts the responsibility of employee conversion notifications to the employee who will be able to initiate the casual conversion with an application in writing to their employer.

Employers will be required to provide a copy of the Casual Employment Information Statement to employees at commencement of employment and then every six months. Where the business employees less than 15 people, this statement will need to be provided when an employee commences work as a casual, at the following six and 12 months and then every 12 months.

Casual employment obligations

In line with the changes to casual employment, Closing the Loophole introduces several civil penalties for employers who:

• make false statements to persuade or influence an individual in a permanent role to accept a casual employment agreement / contract where they will perform the same, or substantially the same work.
• dismiss or threaten to dismiss permanent employees and then re-employ them as a casual employee to perform the same, or substantially the same work.