Important Update: Changes to Casual Employment Starting 26 August 2024

There are legal changes impacting casual employment commencing 26 August 2024. If you employ casuals, this is important to read and take action.

This is a reminder of significant changes to employment laws coming into effect next Monday, 26 August 2024, which will impact how you manage casual employees, independent contractors, and introduce new rules about the ‘right to disconnect’ after work hours.

In this update, we're focusing on the changes to casual employment, as they are particularly important for many of our clients who hire casual workers. We’ll cover the other changes in future communications, so keep an eye out for more details!

What’s Changing for Casual Employment?

New Definition of Casual Employee

The legislation introduces a fairer definition of what constitutes a casual employee, focusing on the practical reality of the working relationship, not just what's in the employment contract. An employee is considered casual if there is no firm advance commitment to continuing and indefinite work. Factors that determine casual status now include:

• Whether the employer can choose to offer work and the employee can accept or reject it.

• If the nature of the business suggests that ongoing work is likely.

• Whether similar roles are performed by part-time or full-time employees.

• If the employee has a regular pattern of work, though regularity alone doesn’t confirm permanency.

• Employees engaged as casuals will remain casual until their status is changed through a clear conversion process or a mutual agreement to accept a different type of employment.
  

Casual Conversion Rights

Under the new changes, the automatic obligation for employers to offer conversion to permanent roles after 12 months is being replaced. Instead, casual employees will have the right to request conversion to full-time or part-time employment if:

• They’ve been employed for at least 6 months (or 12 months if your business has fewer than 15 employees).

• They’ve worked a regular pattern of hours for the last six months.

• Employers will have 21 days to respond to a conversion request and can only refuse it on reasonable business grounds, such as operational requirements that would make conversion impractical.

Casual Employment Information Statement (CEIS)

Employers must provide casual employees with the updated Casual Employment Information Statement at the start of their employment and periodically thereafter. For small businesses, this means after 12 months of employment. For all other employers, it’s at 6 months, 12 months, and then annually. You can access the CEIS here.

When Do These Changes Take Effect?

For casual employees hired on or after 26 August 2024, these changes apply immediately.

For those hired before 26 August 2024, the current rules will continue for a transition period of 6 months. If any casual employees have their 12 month anniversary after the 26th August, you are still obligated to offer casual conversion in accordance previous casual conversion rules.

What Should You Do Now?

• Review Employment Contracts: Ensure your casual employment contracts are updated to reflect the new definition of casual employment, changes to casual conversion and clearly separate the casual loading from the base rate of pay.

• Update Processes: Make sure you’re providing the CEIS at the required times, and consider setting up reminders for when to distribute this statement again.

• Evaluate Work Patterns: Regularly review how casual employees are rostered and whether their work patterns could justify offering them part-time or full-time employment.

• Track Employment Anniversaries: Note when existing casual employees will reach 12 months of service and be prepared to discuss conversion to permanent roles where applicable.

• Seek Professional Advice: Contact us if you need help updating your contract templates or understanding these new requirements. We’re here to help ensure your business remains compliant.

These changes aim to create a fairer, more transparent pathway for casual employees and offer greater clarity for employers. Reviewing your current practices now will help you align with the new requirements and avoid potential financial penalties.

If you have any questions or need further assistance, please reach out to us at [email protected].