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HSA Breaks down new laws for casual workers

April 22, 2021

On 27 March 2021, the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2021 (“FW Amendment Act”) commenced operating.

The FW Amendment Act changes the definition of a “casual employee” in the Fair Work Act 2009 (“FW Act”) and inserts casual conversion conditions into the National Employment Standards (“NES”).

What does a casual employee mean?

Previously, the FW Act included references to a “casual employee” but did not include a definition. In a recent case, the Federal Court found the common-law test for casual employment applied under the Fair Work Act.

Most importantly, the Court decided that some employees who were referred to as “permanent casuals” by their employer were actually permanent employees, and entitled to paid leave under the NES.

The Coalition has now amended the Act to retrospectively change the definition of “casual employee”. Retrospectively means that this new definition now applies to all casual workers, including any jobs you may have held in the past as a casual employee.

Under the new legislation, you are considered to be a casual employee if:

1: You are offered a job.

2: the job offer does not include a firm advancement commitment that the work will continue indefinitely with an agreed pattern of work (i.e. your rostered shifts, days and/or hours worked).

3: You accept the offer, knowing that there is no firm advancement commitment, and become an employee.

A firm advancement commitment means you must be given written confirmation that you will work a set number of days and/or hours in your job offer.

This definition applies to all job offers given “before, on, or after” the commencement of the FW Amendment Act, meaning it applies retrospectively to an existing job offer you may have received.

Converting from casual to permanent employment

Casual conversion conditions are already common in awards and enterprise agreements. The FW Amendment Act means that casual conversion entitlements are included in the NES for the first time. The NES conditions may be better than the existing award or agreement conditions, but in many cases they are inferior.

Depending on your working conditions, you may:

  • Be offered a permanent position.
  • Request to become a permanent employee.

Offer of conversion (this does not apply to small businesses – less than 15 employees)

You must receive a written offer of conversion from your employer by the 27 September 2021, or your 12-month anniversary (whichever is later), if:

  • You’ve been employed for at least 12 months.
  • You’ve worked a regular pattern of hours for the last 6 months on an ongoing basis.
  • Your hours could continue as a permanent employee (part-time or full-time) without significant changes.

However, an employer can decide not to make an offer of conversion if there are reasonable grounds for them not to do so. Some examples of reasonable grounds are identified in the legislation and include: the position will cease in the next year, the hours of work are likely to reduce or be changed significantly in the future.

The employer must provide the grounds relied upon to not make an offer in writing to an employee and the grounds must be based on facts known or reasonably foreseeable.

Request for conversion – small business employees

If you’re a small business employee, you can request to convert from a casual to a permanent employee at any time from 27 March 2021 if:

  • You’ve been employed for at least 12 months.
  • You’ve worked a regular pattern of hours for the last 6 months on an ongoing basis.
  • Your regular hours could continue as a permanent employee without significant changes.
  • You haven’t refused a previous offer to become a permanent employee in the past 6 months.
  • Your employer hasn’t already refused a request from you to become a permanent employee based on reasonable grounds in the past 6 months.

If you meet these criteria, you can make a request in writing (i.e. email or written letter), from 21 days after your 12-month anniversary. Your employer must respond within 21 days, in writing, and they can only deny your request if they have consulted with you, and if there are reasonable grounds for doing so.

If you’re not a small business employee, you cannot request a conversion until after 27 September 2021.

Other Changes to the Fair Work Act

Other changes made by the FW Amendment Act include:

  • The FWC must review and amend casual conditions in modern awards within 6 months to make sure they are consistent with the FW Amendment Act.
  • The FWC has been given additional jurisdiction to vary enterprise agreements if the interaction of the agreement terms and the FW Amendment Act creates uncertainty or difficulties.
  • Offsetting of underpayments: Courts must now offset casual loading payments against underpayment claims for paid leave, public holidays, time in lieu or redundancy. This also applies retrospectively to any entitlements earned in the past.
  • Casual employment information statement (“CEIS”): All casual employees must receive a CEIS upon commencement of employment. You can view and download the statement here. Small businesses must provide existing casual employees with the CEIS as soon as possible after 27 March 2021. Non-small business employers must give the CEIS to existing casual employees as soon as possible after 27 September 2021.

If you’re an HSA member and need advice or support, send us a message and we’ll get back to you ASAP.

If you’re not already a member, then it’s time to sign up! Our legal team can help you with expert advice on your rights at work, help with disputes, underpayments, and any other issues you have.

Frequently Asked Questions

How is this different to the different to the previous definition?

The common law definition of a casual employee which previously applied under the NES meant that courts could rule on whether your employment was casual or permanent. This decision was decided on whether regular hours have been worked, whether the hours were rostered and the terms of the employment contract.

However, the new definition focuses solely on the terms of the offer made by the employer, and prevents courts looking your working conditions to assess whether you truly are a casual employee.

When does my employer need to give me an offer to convert to permanent employment?

If you have already been employed for at least 12 months and you meet the eligibility requirements, you must receive an offer to convert your casual position to a permanent position before 27 September 2021. This also includes if you hit your 12-month anniversary between now and 27 September 2021.

After this period, if you are eligible, you must receive an offer to convert within 21 days of your 12-month anniversary.

If I’m offered a conversion, do I have to say yes?

You do not have to accept an offer; however, if you decline an offer, you cannot request to convert to permanent employment for the next 6 months.

I’m employed in a small business; what are my options?

Small businesses are not required to offer a casual employee conversion to permanent employment. However, you can request to convert your position, provided you meet all the eligibility requirements.

Can I request to convert from a casual to permanent employee?

Yes, provided you meet the following criteria:

  • You’ve been employed for at least 12 months
  • You’ve worked a regular pattern of hours for the last 6 months on an ongoing basis
  • Your regular hours could continue as a permanent employee without significant changes.
  • You haven’t refused a previous offer to become a permanent employee in the past 6 months.
  • Your employer hasn’t already refused a request from you to become a permanent employee based on reasonable grounds in the past 6 months.

How do I make a request?

You must make your request in writing, either by email or in a letter. You should include:

  • The length of time you’ve been employed
  • Information on the hours you have worked
  • An explanation that you believe you meet all the criteria.
  • A request for a response within 21 days, as per the Fair Work Act.

What does ‘reasonable grounds’ mean?

An employer can refuse a request if it’s known, or reasonably foreseeable, that:

  • Your position won’t exist in 12 months.
  • Your hours of work will significantly reduce.
  • Your days or times or work will significantly change, and this can’t be accommodated with your current or future availability.
  • Your employer would have to make a significant adjustment to your work hours to provide full-time or part-time employment.
  • Making the offer would not comply with a recruitment or selection process required by or under Commonwealth, State or Territory law.

My employer says I don’t meet requirements, but I believe I do. What can I do?

The Fair Work Commission has been given additional jurisdiction to deal with disputes about the new casual conversion provisions.

However, if the dispute can be dealt with under the dispute resolution procedure in your Enterprise Agreement, Award, or Contract, you must use that system, rather than the new processes in the FW Act.

If you do have a dispute, reach out to HSA and we will help you through the process.

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