The landscape of employment laws is constantly evolving, and staying abreast of these changes is crucial for both employers and employees alike. In particular the ‘Closing the Loopholes’ legislation ushers in a significant number of changes to be across.

One of the changes that will have far reaching implications is the amendment to the definition of ‘casual employment’ in the Fair Work Act 2009.

This amendment is contained in the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 which received Royal Assent on the 26^th of February 2024 and has application from the 26^th of August 2024.

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Under the amendments, the current Section 15A of the Fair Work Act 2009 will be repealed and replaced with a new Section 15A.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 would be entitled to a casual loading or a specific rate of pay for casual employees under the terms of a fair work instrument if the employee were a casual employee, or the employee is entitled to such a loading or rate of pay 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 not rising to the level of a term of that contract (or to a variation of any such term); 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):

• 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 (and whether this occurs in practice);
• whether, having regard to the nature of the employer’s enterprise, it is reasonably likely that there will be future availability of continuing work in that enterprise of the kind usually performed by the employee;
• whether there are full‑time employees or part‑time employees performing the same kind of work in the employer’s enterprise that is usually performed by the employee;
• whether there is a regular pattern of work for the employee.

It is noted that there are some limited exceptions to the rule contained within the new Section 15A that relate to academic/teaching staff at higher education institutions.

Employee Notification and Employer Response

Furthermore, the amendment introduces provisions for employee notification and employer response regarding changes in employment status.

Under Section 66AAB, 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 that varies depending on whether the employer is a small business employer.

Where the employer is a small business employer, the minimum employment requirement is 12 months.  For all other employers, the requirement is 6 months.

Employers who receive a written notification from a casual employee under Section 66AAB are then required to respond within 21 days.  The response must be in writing and include the following:

1. a statement that the employer: accepts the notification; does not accept the notification on one or more grounds referred to below; and
2. if the employer accepts the notification—the following information: whether the employee is changing to full‑time employment or part‑time employment; the employee’s hours of work after the change takes effect; the day the employee’s change to full‑time employment or part‑time employment takes effect;
3. if the employer does not accept the notification—reasons for the employer’s decision.

Before giving a response, the employer must consult with the employee about the notification and must, if the employer is accepting the notification, discuss the matters the employer intends to specify as per item 2 above.

Grounds for employer to not accept notification:

The employer may not accept the notification 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 by or 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 enterprise is organised;
• there would be significant impacts on the operation of the employer’s enterprise;
• substantial changes to the employee’s terms and conditions would be reasonably 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 (as the case may be).

Importance of the Casual Employment Information Statement

It’s important to note the requirement for employers to provide casual employees with the Casual Employment Information Statement.

An employer must give a casual employee the Casual Employment Information Statement:

a. before, or as soon as practicable after, the employee starts employment as a casual employee with the employer; and

b. as soon as practicable after the employee has been employed by the employer for a period of 6 months beginning the day the employment started; and

c. as soon as practicable after the following:

(i.) the employee has been employed by the employer for a period of 12 months beginning the day the employment started;

(ii.) the end of any subsequent period of 12 months for which the employee is employed by the employer.

However, items b and c(ii) do not apply if the employer is a small business employer.

Dispute Resolution Mechanism

In cases where disputes arise regarding the operation of casual employment provisions, mechanisms for resolution are outlined in the Act. Parties are encouraged to resolve disputes at the workplace level through discussions. If unresolved, disputes may be referred to the Fair Work Commission (FWC).

Implications and Compliance

It is important for both employers and employees to understand the revised definition of casual employment and its implications.  Employers should review their existing contracts and employment arrangements to ensure compliance with the amended provisions. Likewise, employees should be aware of their rights and entitlements under the new legislation.

These changes are set to commence from 26 August 2024. By understanding these amendments, providing employees with the Casual Employment Information Statement, and ensuring compliance, employers and employees can navigate the intricacies of casual employment relationships more effectively.

If you have questions regarding the new definition of casual employment, and the implications for you and/or 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