On 12 February 2024, the federal government approved the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 which introduced a new definition of casual employment and amended the casual conversion requirements under the Fair Work Act 2009.
The casual employment legislation changes will be effective on 26 August 2024, significantly impacting businesses.
What are the significant impacts?
The new definition is defined in two elements describing casual employment as ‘no firm advance commitment to continuing and indefinite work, including the real substance, practical reality and true nature of the employment relationship’ and ‘their entitlement to receive a casual loading or specific rate of pay’.
The new definition may restrict employers’ ability to engage new employees as casuals and consider the true nature of the employment relationship as opposed to the terms of the employment contract. When trying to distinguish the specific indicators employers will need to consider:
This definition does not include a requirement for an agreed regular pattern of work, however, an employee who has a regular pattern of work may still be a casual employee if there is no firm advance commitmentto continuing and indefinite work.
What are the employees’ rights?
A Casual employee now has the right to submit an application that describes their reasoning for no longer meeting their casual employment conditions. Previously it was the employer’s responsibility to offer a conversion request every 12 months to regular casuals, however, the new legislation leaves this in the employee’s hands to initiate and submit their own request. No employee will be forced to convert from casual employment unless they choose to, and they must have worked for at least 6 months (or 12 months for a small business employer).
What are the employers’ new responsibilities?
An employer must consult with the employee in the first instance and ensure they respond within 21 days to the employee’s request, whether they accept or deny the application. An employer will now have new consultation obligations to adhere to as the Act has introduced limits for the grounds for declining a request and the opportunity for the employees to raise a dispute with the Fair Work Commission.
What are the major risks for employers?
New offences have been introduced for employers who misuse casual employment or have been found to misclassify a casual, which can result in backpay of leave entitlements they would have been entitled to as well as offences of up to $93,900 for individuals and $469,500 for companies per offence.
Now is the time for employers to take a stock take of their employees – paying close attention to the casual employees who are engaged. Employers should consider updating employment contracts to reflect the new definition of casual employment.
How We Can Help:
You can’t afford to get it wrong! SABC’s team of Consultants are experts in industrial relations and can work with you to review your employment arrangements, conduct an audit on your casual employees and draft new employment contracts to ensure your compliance.
Our team of Workplace Advisors are also on standby to discuss the new casual employment regulations and prepare you with the knowledge and tools needed through the change
Contact our Business Advice Hotline on (08) 8300 0000 (select option 1) and we will make sure you are not at risk of a costly underpayment.
