The Fair Work Act amendments for casual employees are now in force. All national system employers are affected, and all must act to ensure they are compliant. This EMA Note sets out what key steps employers need to take.
In our previous EMA Note Issue 6, we summarised some key changes to casual employment passed by the Parliament. What do employers now need to do, and when?
Casual employment information statement
The Fair Work Ombudsman ("FWO") has now published the Casual Employment Information Statement. It can be downloaded from the FWO website along with instructions for its use. This must be issued:
to all new casual employees before – or as soon as practicable after – commencement of their employment;
to existing casual employees in a small business – as soon as practicable; and
to all existing casual employees in a business that is not a small business – as soon as practicable after 27 September 2021.
Offers for permanent employment
All national system employers need to assess how the changed rules on casual conversion affect them.
The National Employment Standards ("NES") now provide that a casual who has been employed for 12 months is eligible to convert to permanent employment if during the previous six months they have worked a regular pattern of hours on an ongoing basis which, without significant adjustment, they could continue as a full-time employee or a part-time employee.
If an applicable enterprise agreement or award provides a more beneficial provision, it will apply to the extent of inconsistency with the NES. However, no award or enterprise agreement provision can be applied detrimentally to the NES.
For employers with 15 or more employees
Employers are now obliged to formally offer an eligible casual employee conversion to permanent employment unless there are reasonable business grounds not to. Eligible employees may also request conversion. There are complex rules about how and when the written offers are to be made and what constitutes reasonable business grounds. These can be accessed on the FWO website and EMA Consulting can help you to interpret them practically.
For eligible casual employees employed before 27 March 2021, the offer must be made before 27 September 2021 or the 12-month anniversary, whichever is later.
For employees who commenced after 27 March 2021, the offer must be made within 21 days of them becoming eligible. If an offer is not to be made, the reasons must be set out in writing.
For small businesses
A small business employer is not obliged to make a formal offer of permanent employment, but an eligible employee may request conversion to permanent. The employer must consult with that employee and must provide a formal response within 21 days of the request.
Redrafting employment letters and contracts
All employment letters and contracts for casuals must be reviewed to ensure that they:
are consistent with the new definition of "casual employee" under the Fair Work Act 2009 ("FW Act"); and
do not undermine the new NES rules for casual conversion.
Casual conversion clauses
Enterprise agreements must be reviewed to ensure that casual conversion clauses do not operate detrimentally compared to the NES. Any provision that is more beneficial to the employee will still apply under the enterprise agreement s (eg a shorter eligibility period), but any provision undermining the NES will be inoperable (eg if there is no requirement on the employer to make a formal offer). If there is no clause on casual conversion, the NES will apply.
When enterprise agreements are being renegotiated, any incompatibility with the NES should be removed.
Definition of casual employee
We strongly recommend that specific advice is sought by any employer who is currently drafting an enterprise agreement. Great care must be exercised over clauses defining or describing a casual employee. The new definition of "casual" in the FW Act introduces risk for employers who do not properly assess the interaction between the agreement and the FW Act in their own workplace circumstances.
Require further information/assistance?
EMA Consulting will soon launch a Casual Conversion pack containing advice, template policy and template letters. If you require further information or advice, please contact your Consultant.