Published June 2022
This is a brief reminder of the importance of those significant changes to casual employment introduced to the Fair Work Act 2009 on 27 March 2021.
Some of you may remember receiving our Practical Guide to Casual Employment information last year. However, for those of you who did not receive our guide, or if you are simply wanting to recap, you can click on the following link to access it here. In the meantime, the below information outlines the main points of our Guide to Casual Employment.
1. DOES THIS APPLY TO ME?
If your business currently employs or intends on employing casuals, then it is strongly advised that you take a moment to revisit this information. It is relevant to all businesses, of all sizes, in all industries.
2. WHY DO I NEED TO KNOW ABOUT THIS?
Employers additional obligations rely heavily on correct clauses being included in employment contracts (among other things). Businesses who fail to make necessary changes, such as not updating employment contracts or assessing casual conversion entitlements, may be at risk of potential claims in the thousands along with heavy penalties for breaching casual conversion provisions.
3. SUMMARY OF OUR GUIDE
Some of the areas our practical guide covered were:
a. A Clear Definition of Casual Employment
An individual will be considered a casual employee when an offer of employment “is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work…”.
The person must accept the offer on that basis and be an Employee as a result of acceptance. The assessment of the definition takes place at the offer and acceptance of employment stage and relies on what is noted in the employment contract.
b. New Casual Conversion Requirements & Entitlements
That is, converting casuals to permanent employment after 12 months of service, in some circumstances. These entitlements are now included in the National Employment Standards (NES).
Note that there are several different aspects to this change. This Guide breaks down the different requirements for all business sizes and we also outline how the existing casual conversion clauses in Modern Awards and Enterprise Agreements interact with the new NES entitlements.
c. Casual Loading Offset (no more double dipping)
Where a court determines that a casual Employee should have been permanent, any back payments or entitlements owing to them (for annual leave, public holidays etc.), may be reduced (offset) by the 25% casual loading already paid to them. Note that this reduction must be requested and relies on the employment contract containing a suitable set-off clause.
d. New Casual Employment Information Statement
Must be provided to all new and existing casual Employees in addition to the Fair Work Information Statement you should already be providing. This is available on the Fair Work website – here.
4. CASUAL CONVERSION
4.1 What is Casual Conversion?
Casual conversion is the process of converting an individuals’ casual employment to permanent employment. Permanent employment may be full-time or part-time, depending on the number of hours worked by the employee.
Offers should be made and/or accepted in most circumstances if:
- The employee has been employed for 12 months; and
- The employee has worked a regular pattern of hours on an ongoing basis for at least the last 6 months; and
- No significant changes need to be made if the employee is to continue working their hours as a full-time or part-time employee.
Reasonable grounds for not offering casual conversion or declining an employee’s request include that, in the next 12 months:
- The position won’t exist;
- The employee’s hours of work will significantly reduce;
- The employee’s days or times of work will significantly change, and that can’t be accommodated within the employee’s available days or times for work.
Other reasonable grounds include:
- The employer would have to make a significant adjustment to the employee’s work hours for them to be employed full-time or part-time;
- Making and offer/declining a request would not comply with a recruitment or selection process required by or under a Commonwealth, State or Territory law.
Employers must not take any shortcuts to avoid having to offer or accept requests for casual conversion.
For example, Employers cannot change hours of work or terminate a casual employee just for the purpose of making them not eligible for casual conversion.
5. NEW REQUIREMENTS - SMALL BUSINESS (FEWER THAN 15 EMPLOYEES)
As a Small Business (one with fewer than 15 employees), you do not have to offer casual conversion to employees under the new NES entitlements, however casual employees will have the right to request casual conversion.
If they meet the criteria listed in section 4.1, the request should be approved.
5.1 How to respond to a Request:
- A response must be provided in writing within 21 days of receiving an employee’s request regardless of whether you are accepting or denying the request.
- If denying a request, reasons must be provided as to why the request has been denied.
- An offer cannot be refused in writing until a discussion has happened between you and the employee.
5.2 Accepting an Employees request for Casual Conversion:
- If you accept an employee’s request to move their employment from casual to permanent, it is important that you discuss the following before the change is made:
- Whether the employee will be part-time or full-time;
- The required hours of work;
- The date the employee will become permanent (which should generally be the following pay period).
- This information must then be provided in writing to the employee, within 21 days after the employee requested casual conversion.
- Edwards HR recommends issuing a new employee agreement when an employee changes from casual to permanent.
Be sure to check any Modern Award or Enterprise Agreement that applies to your employees to confirm whether any other provisions apply.
6. NEW REQUIREMENTS - BIGGER BUSINESSES (MORE THAN 15 EMPLOYEES)
Businesses with more than 15 employees have different, more rigorous obligations.
6.1 New Casuals
Written intentions of casual conversion must be made to the employee within 21 days of their 12-month anniversary, in accordance with the steps above.
Make Things Easy! Each time a new casual employee starts, create a calendar reminder for when they are approaching their 12-month anniversary, so you can meet your obligations and assess whether an offer of permanent employment will be made or not.
Be sure to check any Modern Award or Enterprise Agreement that applies to your employees to confirm whether any other provisions apply.
Documenting these offers, requests and associated responses can be tricky, so businesses should seek advice about their specific circumstances. The team at Edwards HR can help with all of your casual employment needs and questions.
WE CAN HELP!
CONSIDER A HR HEALTH CHECK
The HR Health Check (audit) by Edwards HR is one of our most popular services.
It’s a compliance and best practice assessment of your current systems, practices and documents relating to 8 priority areas including pay/entitlements, contracts, recruitment/induction, contractors, policies, training, record keeping and injury management – and yes, it includes the casual obligations detailed in this Guide!
We also offer tailored audit services if there are specific areas you want to assess. For example, wages, Award and NES compliance.
For a simple, fixed fee, we’ll meet with you to conduct the assessment and provide plenty of practical guidance. Then afterwards, you’ll receive a written findings report, including our detailed recommendations.
It’s a very small price to pay when compared with the fines, disgruntled employees and reputational damage that come with getting it all wrong.
CONSIDER AN OUTSOURCED HR SOLUTION
There are many obligations and laws that employers need to be aware of – it’s a headache – we know!!
Our Business Partner Package makes HR & workplace relations easy and will ensure you are meeting your employer compliance obligations while also working towards achieving HR best practice. You will also have unlimited access to a dedicated, on-call HR Business Partner to support your business. It’s the complete outsourced HR solution.
And what’s even better – on average, our fees will be 80% less than the cost of hiring an internal HR resource! It is a very cost-effective solution!
Read more about our premium package here or contact Emma to find out how we can support your business.
For more guidance about how these changes apply to you, or to find out how Edwards HR can support your business, contact our team today!
You can reach us on 07 3568 0866
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