Key Updates to Casual Employment Rules

Commencing 26 August 2024 (26 February 2025 for small businesses), the Fair Work Act 2009 (Cth) (the Act) will introduce important changes relating to casual employment. These changes form part of the second phase of the Federal Government’s Closing Loopholes reforms having received Royal Ascent earlier this year. These changes include a new definition of casual employment, updated rules for converting casual employment to permanent status, and revised requirements for providing the Casual Employment Information Statement (CEIS).

The new definition of casual employment will focus on the practical reality of the employment relationship, rather than just the terms outlined in the employment contract.

Under this new definition, an employee will only be considered a casual if:

• there is no firm advanced commitment to continuing and indefinite work, taking into account a number of factors, including the real substance, practical reality and true nature of the employment relationship,
• they’re entitled to receive a casual loading or specific casual pay rate.

In other words, there is a greater requirement under the new definition, to look  beyond the paperwork to see how the actual working relationship plays out.  The Act will also be amended to include a list of factors to assist in determining whether a commitment exists.

Once the new definition takes effect, employers are not required to convert current casual employees who no longer meet the casual definition, to permanent employment. Employees who are casual, will remain casual until their employment status changes either through:

• a conversion process or Fair Work Commission order, or
• the employee accepting an alternative employment offer and starting work on that basis.

The Act removes the existing casual conversion provisions and replaces it with an “employee choice” framework. The provisions remove the onus on the employer to offer casual conversion and instead places the requirement on the employee to request conversion. Casual employees who believe they no longer meet the requirements to be classified as a casual employee may now give an employer written notification requesting to change their employment status to permanent employment after 6 months’ employment, or 12 months for small businesses.

However, employees cannot notify their employer of their intention to convert to permanent employment if they:

• are currently engaged in an ongoing dispute with their employer about casual conversion, or
• in the last 6 months:
  • their employer refused a previous notification,
  • they’ve resolved a dispute with their employer about casual conversion.

The CEIS outlines employment conditions and must be given to all new casual employees. The CEIS should now be provided:

• To new casual employees before or shortly after they start their job.
• To casual employees in non-small businesses as soon as possible after 6 months and 12 months of employment, and then every 12 months thereafter.
• To casual employees in small businesses as soon as possible after 12 months of employment.

1. It’s crucial to clearly communicate casual employment status in contracts and all interactions with employees. Including providing the CEIS.
2. The duty to request conversion from casual to permanent employment now lies with employees, but employers must still ensure correct classification of employment status.
3. Employers must fulfil current obligations, including offering conversion, until the new rules take effect.

If you would like to know more about the changes to casual employment, please contact us and a Mapien Workplace Strategist will be in touch within 24 hours.