Casual Conversion onus moving to Employees

There are just over three months from the implementation of changes to the definition of casual employee and the introduction of ‘the employee choice’ mechanism for conversion to permanent employment. Christy Chacko, Associate at IRiQ Law has authored the following guidance and insight into what Employer’s need to know and do to prepare for the change.

Key Changes

New definition of Casual Employee

A new definition of a casual employee will become operative from 26 August 2024 for employers with 15 or more employees. The new definition provides that a casual employee is:

• characterised by an absence of a firm advance commitment to continuing and indefinite work; and 
• entitled to a causal loading or specific rate of pay. 

For the purpose of determining if the employment is casual, the new definition permits parties (and the FWC) to have regard to the “real substance, practical reality and true nature of the relationship” which entails consideration of how it is performed.

Existing casual employees will remain so under the existing definition. The changes will only apply to new casual employees after 26 August 2024.

This new definition upsets the certainty employers enjoyed under the ‘engaged and paid as such’ approach under the current definition. With the prospect of uncertainty around the status of a casual employee during their engagement, Employers will be well served by establishing systems to regularly reassess how they are engaging casual employees.

Casual Conversion through Employee Choice

On and from 26 August 2024 the current casual conversion arrangements will be abolished. After 26 August 2024 Employers with 15 or more employees will no longer be required to make casual conversion offers to employees. For small business employers, that change takes effect from 26 February 2025.

Instead, under Employee Choice, Employees who have worked for at least six months (or 12 months if employed by a small business employer) may notify their employer in writing if they believe they no longer meet the definition of a casual employee.

Upon receiving such a request, the employer must within 21 days, consult with the Employee and provide a written response either accepting or refusing the conversion.

An Employer may refuse the request on any of the following grounds:

• The Employee still meets the definition of a casual employee; or  
• There are fair and reasonable operational grounds’ for not accepting the notification’ or  
• that 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. 

In the event of a dispute, the Fair Work Commission (FWC) will have the power to determine, by mandatory arbitration, whether an employer had reasonable grounds to refuse a request for casual conversion.

During the transitional period, between 26 August 2024 and 26 February 2015, existing casual employees will retain their existing casual conversation rights.

Casual Employment Information Statement (CEIS)

As is current practice, all Employers must provide a new casual employee with the CEIS either before, or as soon as possible after, the start of their employment.

A new obligation to provide the CEIS at the following regular intervals will be effective from 26 August 2024:

• Non- Small Businesses  
  • 6 months of employment 
  • 12 months of employment and every subsequent period of 12 months of employment 

• Small Businesses 
  • as soon as possible after 12 months of employment.

Team IRiQ are available for any further queries, please don’t hesitate to contact us.