SKY UPDATE | IMPORTANT CHANGES TO CASUAL EMPLOYMENT FROM 26 AUGUST

18 July 2024  

We previously wrote about the changes affecting casual employment  relationships introduced as part of the ‘Closing the Loopholes’ legislation passed by Parliament back in February 2024.

With these changes set to come into effect from the 26th of August, employers need to make sure they are across the new requirements.

The following is a summary of the key items that employers should be aware of.

Defining Casual Employment

Under the amendments, the current Section 15A of the Fair Work Act 2009 will be repealed and replaced with a new Section 15A. 

According to the new Section 15A, an employee is considered a casual employee of an employer only if:

  • the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work; and
  • the employee is entitled to a casual loading or a specific rate of pay for casual employees under the terms of a fair work instrument or under the contract of employment.

Whether an employment relationship lacks a firm advance commitment to continuing and indefinite work is to be assessed:

  1. on the basis of the real substance, practical reality and true nature of the employment relationship; and
  2. on the basis that a firm advance commitment can be in the form of the contract of employment or, in addition to the terms of that contract, in the form of a mutual understanding or expectation between the employer and employee; and
  3. having regard to, but not limited to, the following considerations (which may indicate the presence, rather than an absence, of such a commitment):
  4. whether there is an inability of the employer to elect to offer, or not offer work or an inability of the employee to elect to accept or reject work.
  5. whether, having regard to the nature of the employer’s business, it is reasonably likely that there will be future availability of continuing work of the kind usually performed by the employee.
  6. whether there are full‑time employees or part‑time employees performing the same kind of work in the employer’s business.
  7. whether there is a regular pattern of work for the employee.

Employee Notification and Employer Response

The amendments introduce provisions for employee notification and employer response regarding changes in employment status.

Under these provisions, a casual employee may provide written notification to the employer if they believe they no longer meet the requirements of casual employment.  

To be eligible, the employee must have been employed for a minimum period.  This period is 12 months for small business employers and 6 months for all other employers.

Employers who receive a written notification from a casual employee are required to consult with the employee and provide a response within 21 days. 

The response must be in writing and include a statement that the employer either accepts or does not accept the notification.

If the employer accepts the notification, the response must detail:

  • The new employment status (eg full-time or part-time);
  • The new hours of work; and
  • The date the change will take effect.

If the employer does not accept the notification, the response must include the reasons for refusal.

The employer can refuse the change on any of the following grounds:

  • having regard to requirements of Section 15A, the employee still meets the requirements to be regarded as a casual employee;
  • there are fair and reasonable operational grounds for not accepting the notification (see below);
  • accepting the notification would result in the employer not complying with a recruitment or selection process required under a law of the Commonwealth or a State or a Territory.

Fair and reasonable operational grounds for not accepting the notification include:

  • substantial changes would be required to the way in which work in the employer’s business is organised.
  • there would be significant impacts on the operation of the employer’s business.
  • substantial changes to the employee’s terms and conditions would be necessary to ensure the employer does not contravene a term of a Fair Work instrument that would apply to the employee as a full‑time employee or part‑time employee.

Casual Employment Information Statement

With the impending changes also comes a requirement for employers to provide new casual employees with the Casual Employment Information Statement (CEIS).

The requirement to provide the CEIS is in addition to the existing requirement to provide the Fair Work Information Statement (FWIS).  The CEIS and FWIS must be provided to the employee before, or as soon as practicable after, the employee starts.

Implications and Compliance

We encourage employers to get ahead of the changes to ensure that there arrangements remain compliant beyond the 26th of August.

If you have questions regarding the casual employment changes and the implications for your business, please get in touch.

Sky Accountants Ballarat

Phone: 03 5332 8855

Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia

Postal Address: PO Box 2234, Bakery Hill, Victoria 3354

Sky Accountants Gisborne & Macedon Ranges

Phone: 03 5428 1400

Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia

Postal Address: PO Box 270 Gisborne Victoria 3437