The changes in the Act related to casual employment arose from Federal Court decisions that decided that, based on the conduct of the parties during the employment, certain employees were not casual employees. The effect of these court decisions was that (despite being described as casual employees and being paid as a casual) the employees were held to be entitled to the paid leave and other provisions for ongoing employees in the FWA. A number of legal actions for backpay of paid leave and other entitlements have been commenced and the much publicised Rossato case is scheduled for a High Court of Australia appeal hearing in May 2021.

The Act introduces a new statutory definition of a ‘casual employee’, as the term was not previously defined in the FWA. Section 15A of the FWA now states that a casual employee is an individual who accepts an offer of employment where the employer made “no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person”. The factors that will establish if an advance commitment of regular work has been made, are whether the employee can choose to accept or reject work, whether the employee will work as required by the employer, whether the employment has been labelled as casual, and whether the employee receives a casual loading. Also the time for assessing casual status is to be at the time of offer of employment (and not on the basis of subsequent conduct) and an offer of a regular pattern of hours does not of itself indicate a firm commitment to continuing and indefinite work.

The Act also introduces new rights into the National Employment Standards in the FWA (NES) that allows casual employees to convert to fulltime (FT) or part-time (PT) ongoing employment status, subject to a number of conditions. Casual conversion has been included in many awards of the Fair Work Commission (FWC) over recent years and these awards set out a process for employees to elect whether to request conversion to ongoing status and require employers to notify casual employees of this conversion right. The Act contains new rules on casual conversion for all employees (i.e. not just employees covered by awards) of small businesses and different rules for other businesses. Also employers are required to give casual employees a copy of the new Casual Employee Information Statement (CEIS) (available at https://www.fairwork.gov.au/about-us/news-and-media-releases/website-news/reforms#?print=1). The CEIS sets out information about casual employment and potential conversion rights.

Finally, where employees described as casuals commence legal action for paid leave and other entitlements, the Act introduces a process for Courts to set-off payments made by the employer (e.g. casual loading) where an employee has been specifically described as a casual in their engagement, and it is clearly stated that the casual loading is paid to offset the employee not having the entitlements of ongoing employees. Some unions have stated that they are considering a legal challenge to this part of the Act as it a retrospective change to try to avoid the so called “double dipping” by some employees.

If you require assistance in ensuring that you are compliant with these new casual employment provisions, please contact Peter Wilson at pwilson@prolegis.com.au.