Fair Work Casual Conversion Deadline Looming: An Employer’s Legal Guide
Changes to the Fair Work Act 2009 (Cth) (FW Act) relating to casual employees came into effect on 27 March 2021. While the amendments go some way towards protecting employers from ‘double-dipping’ claims by casual employees, they also impose significant obligations on employers in relation to their casual workers. Among these are the requirement for employers to assess and deploy casual conversion to permanent (full-time or part-time) employment and to ensure casual employment contracts are consistent with the new law.
- By 27 September 2021 employers of more than 15 employees must:
- assess whether any existing casuals employed before 27 March 2021 are eligible to convert to permanent employment.
- make a written offer to the employee of permanent employment or explain why such an offer cannot be made.
- As soon as possible after 27 September 2021, employers of more than 15 employees must provide casual employees with a copy of the Casual Employment Information Statement.
- Employers should be taking steps now to review and update their engagement letters and template employment contracts to ensure these comply with the obligations set out below.
Who is a casual employee?
In partial response to the uncertainty created by the WorkPac v Rossato decision regarding leave entitlements and potential ‘double dipping’ by long-term causals, the FW Act now includes a statutory definition of “casual employee”.
Under the new statutory definition, a person is a casual employee if they accept a job offer from an employer knowing that there is no firm advance commitment to ongoing work with an agreed pattern of work. In essence, whether a person is regarded as a casual employee is assessed at the time they are offered (and accept) employment.
Once employed as a casual, an employee will continue to be a casual employee until they stop being employed by the employer or they become a permanent employee through:
- casual conversion, or
- being offered and accepting full-time or part-time employment.
The new definition has retrospective application which means it applies to casual employment offers made before, on or after the new laws came into effect on 27 March 2021.
Casual Conversion Information Statement
Employers now need to give every new casual employee a Casual Employment Information Statement (Statement) before, or as soon as possible after, they start their new job.
Existing casual employees must also be given a copy of the Statement. For employers with more than 15 employees the Statement must be given as soon as possible after 27 September 2021. If they haven’t already, small business employers (those employing less than 15 employees) should take steps to give the Statement to their casual employees now.
Right to Convert from Casual to Permanent Employment
Under the new laws, all casual employees (including those employed before the new law came into effect) may be entitled to convert to a permanent employee. This is known as ‘casual conversion’.
Under the casual conversion laws, employers with more than 15 employees must assess their casual employees to determine whether they are eligible to receive an offer of full-time or part-time employment. Casual employees can also become permanent by making a request to their employer for casual conversion.
There are eligibility requirements and exceptions that apply and processes that need to be followed. Generally, whether a casual employee is entitled to an offer of, or to make a request for, casual conversion depends on whether the casual employee:
- has worked for their employer for 12 months;
- has worked a regular pattern of hours for at least the last 6 of those months on an ongoing basis; and
- could continue working those hours as a permanent employee without significant changes.
Exceptions apply if an employer has ‘reasonable grounds’ not to make an offer to a casual employee for casual conversion.
Existing Casual Employees
As noted above, the new definition of casual employee under the FW Act applies to all casual employees employed before the laws came into effect.
Employers have until 27 September 2021, to assess whether casual employees employed before 27 March 2021 are eligible to be offered permanent employment. Once assessed, employers have 21 days (but before 27 September 2021) to make a written offer to the employee to convert to permanent employment or explain why such an offer cannot be made.
Reasonable grounds not to offer permanent employment
An employer can refuse to make an offer to an employee who is eligible for casual conversion if the employer has ‘reasonable grounds’. Reasonable grounds for not making an offer include:
- in the next 12 months, the employee’s position won’t exist;
- the hours the employee is required to work will be significantly reduced;
- there will be a significant change to the days/times the employee is required to work which cannot be accommodated by the days/time the employee is available to work, or
- making the offer would not comply with a recruitment or selection process required by federal or state legislation.
A casual worker can make a subsequent request for casual conversion on certain grounds.
Employer’s Guide – what you need to do now
Employers of more than 15 employees must meet the deadline of 27 September 2021 by:
- assessing whether any existing casuals employed before 27 March 2021 are eligible to convert to permanent employment.
- making a written offer to casual employees to convert to permanent employment or explaining why such an offer cannot be made;
- provide casual employees with a copy of the Casual Employment Information Statement.
All employers should be taking steps now to review and update their engagement letters and template employment contracts to ensure these comply with the obligations set out above.
How Ramsden Lawyers can help?
Unsure of what you need to do? Ramsdens Lawyers commercial team is here to help. We can assist you with:
- assessing your casual workforce to determine which casual employees you should offer casual conversion to;
- ensuring you have processes for issuing the Statement to both new and existing employees; and
- reviewing and updating your offers of employment and existing casual employment contracts to ensure they comply with the new laws.
Contact us here, or call our commercial team today on 1300 749 709 for a free 20 minute consultation and to access our free ‘casual conversion checklist’.