A new set of laws redefining the engagement of casual employees is set to take effect on 26 August 2024. These changes are particularly significant for the education and training sector, which relies heavily on casual workers. This article outlines the new rules to help both employees and employers prepare for the upcoming changes.
What Are the Changes to Casual Employment Laws?
The new laws focus on three main areas:
- Redefining ‘Casual Employee’: The definition of a casual employee will change.
- Pathway for Casual to Permanent Conversion: A new process for converting casual employment to permanent status will be introduced.
- New General Protections for Casual Employees: Enhanced protections will be implemented.
Origins and Implementation of the Changes
The changes originate from the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024, passed by the Senate in December 2023. This legislation addresses gaps in previous laws that failed to adequately protect employees. The new rules for casual employment will be implemented on 26 August 2024.
Importance for the Education and Training Sector
The education and training sector's heavy reliance on casual employees has increased post-COVID-19 due to workforce shortages. Many employers turned to casual staff when unable to find permanent employees. Additionally, some permanent employees switched to casual roles for better work-life balance or higher wage loadings. These changes in employment patterns mean that the new laws will significantly impact both providers and casual employees in the education and training sector.
New Definition of a Casual Employee
Under the new laws, a casual employee is defined as someone in a working relationship that:
- Lacks a 'firm advance commitment to continuing and indefinite work'.
- Is entitled to a casual loading or a specific rate of pay for casual employees.
This definition emphasises that an employee’s status is determined by actual work patterns rather than contract terms. For example, a casual employee with consistent shifts may no longer be considered casual if there is predictability in their working pattern.
Evaluating ‘Firm Advance Commitment’
The core of the new definition lies in evaluating the commitment to ongoing work. Five areas are considered:
- Uncertainty about future work availability.
- Uncertainty about the employee's ability to perform future work.
- Likelihood of similar work being available in the future.
- Presence of full-time or part-time employees performing similar work.
- Irregularity of the employee’s work pattern.
If an employee's work pattern is irregular and there is uncertainty about future shifts, the arrangement is likely casual, warranting casual loading.
Implications for the Education and Training Sector
The new definition allows employees on casual contracts to reassess their work arrangements. If they meet the criteria, they can request conversion to a permanent or part-time position.
Casual to Permanent Conversion Pathway
Employees who do not fit the new casual definition and have worked for at least six months (or 12 months for small business employers) can notify their employer in writing of their desire to convert to permanent status. Employers must evaluate the request based on the new casual definition, operational grounds, and compliance with recruitment or selection processes.
Employer's Response to Conversion Requests
Employers must respond within 21 days of receiving a conversion request. They can deny the request if:
- The employee meets the casual definition.
- There are reasonable operational grounds against conversion.
- Compliance with other employment processes prevents conversion.
If none of these conditions apply, the employer must transition the employee to a permanent contract.
Dispute Resolution
The Fair Work Commission (FWC) is empowered to handle disputes regarding the new casual employment rules, including through compulsory arbitration.
New General Protections
Two new protections will be introduced:
- It will be unlawful for employers to dismiss or threaten to dismiss employees to re-engage them as casuals.
- It will be illegal to make false representations about casual employment.
Employers found contravening these provisions may face penalties.
Next Steps for Casual Employees
Casual employees interested in converting to permanent positions should review their current working arrangements to determine if they meet the new casual definitions. If they do not, they can apply for conversion.
Next Steps for Employers
Employers should review their casual engagements to anticipate potential conversion requests and ensure they have the processes and documentation to manage these effectively.
For more details, review the guidelines provided by Fair Work here.
