Effective from 26 August 2024, the Fair Work Act introduced new provisions to define and manage casual employment, impacting employers across all sectors. These changes clarify the definition of casual employment, alter conversion rights and implement new anti-avoidance measures. Here’s what you need to consider and implement in your business.

1. Updated Definition of Casual Employment

The Fair Work Act now provides a refined definition for casual employment. An employee is considered casual if:

• There is no firm, advance commitment to ongoing work with a predictable, indefinite pattern
• The employment arrangement includes casual loading or pay rates.

This assessment depends on several practical factors, such as:

• The employer’s discretion in offering work as needed
• The employee’s option to accept or decline work
• The continuity and regularity of work availability
• Similar duties being performed by permanent employees.

Employees classified as casual before 26 August 2024 will retain their casual status under the updated definition unless they opt to convert to permanent employment. For employees hired from 26 August 2024, the new casual employment definition will apply.

Action:
Reassess all casual contracts: Verify if they align with the new legal definition of casual employment and do not imply a “firm, advance commitment” to ongoing work. Casual contracts should clearly outline casual loading or pay rates if applicable, and specify the nature of work availability and the employee’s ability to accept or reject work shifts.
Update recruitment practices: With new hires, ensure that hiring terms reflect the revised criteria, including no advance commitment to ongoing work with a fixed pattern.

You can learn more at: Fair Work – Casual Employees

2. Introduction of the Employee Choice Framework

Replacing the former requirement to offer casual-to-permanent conversion, the Employee Choice Framework empowers eligible employees to initiate this change. Casual employees who have worked for 12 months with a small business (or 6 months with larger businesses) may request conversion to permanent employment if they believe they no longer qualify as casual.

Employer Obligations:
Employers must respond to employee requests within 21 days. Rejection is permissible only if the employee still meets the casual definition or operational constraints justify refusal. The framework maintains current casual conversion rights until 26 February 2025 for employees hired before 26 August 2024, providing a transition period for employers.

Action:
Process review: Implement or update your processes for casual conversion, including the requirement to respond to eligible employees’ requests within 21 days. Consider whether this will impact payroll systems for managing casual employees before and after the changes.
Communicate with casual employees: Clearly communicate any relevant changes to all casual employees, both existing and new hires. Address eligibility for conversion to permanent employment and other rights through documented meetings or written notices.

You can learn more at: Fair Work – Casual Conversion

3. Casual Employment Information Statement (CEIS)

To enhance transparency, employers must provide casual employees with the Casual Employment Information Statement (CEIS) at the following stages:

• At the start of employment
• At 6 months (large businesses), 12 months (all businesses) and annually thereafter.

This approach ensures casual employees are informed of their rights throughout their employment journey.

Action:
Provide the CEIS to all casual employees: Ensure the CEIS is provided at the start of employment and diarise to provide it again at 6 months, 12 months and annually thereafter for any workers who remain casual.

You can learn more and access the CEIS at: Fair Work – Casual Employment Information Statement

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Your next step

1. Review Casual Contract templates before issuing to a new casual employee
2. Update recruitment practices
3. Review casual conversion processes
4. Communicate changes to casual employees
5. Provide Casual Employment Information Statement (CEIS) and diarise future times to provide again.

For more information and support to implement any of these requirements, contact your FCHR Consultant.