Casual, by definition, means relaxed and unconcerned. But ironically, the uncertain nature of casual employment has led to concern for workers all around Australia. So much so that it prompted a legislative shake-up on March 27, 2021 – leading to a new definition of casual employee.
Whether you’re a small or large business, having a casual team can work wonders. Employees are only engaged on an as-needs-basis, giving you the flexibility to increase staffing during busier periods and reduce wage expenses during quieter times. However, with great flexibility can come great uncertainty.
Thankfully, the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021, amendments to the Fair Work Act 2009 (Cth) (“FW Act”), has finally been passed. Employers will now need to give casual workers a clear pathway to ongoing employment, and may be required to offer them a permanent position after 12 months of regular shifts.
Not only that, the FW Act has, for the first time, outlined the definition of casual employee.
Casual employee definition
Under the new section 15A(1) of the FW Act a person is a“casual employee” if they are made an offer of employment by an employer on the basis that there is “no firm advanced commitment to continuing and indefinite work according to an agreed pattern of work” the person accepts that offer and that offer results in the person becoming and employee.
Before this amendment, characterising employees as casual was assessed on a case-by-case basis. It was based on the individual relationships between employer and employee (looking at substance), rather than through the plain language of the employment contract itself (i.e. form). In other words, a statement like “your engagement is on a casual basis only” was not enough to conclude that the employment was, in fact, a casual one.
The new casual worker definition can help both employers and employees to understand the true nature of their relationship. The terms of the employment contract and the intention of all parties at the time of entering the employment relationship are determinative.
What are the requirements of casual work?
The FW Act has outlined a few requirements to determine whether at the time the offer was made there was, indeed, “no firm advanced commitment to continuing and indefinite work according to an agreed pattern of work.”
Section 15A(2) of the FW Act provides that only the following will be considered:
- Whether the employer can elect to offer work and whether the person can elect to accept or reject work;
- Whether the person will work as required according to the needs of the employer;
- Whether the employment is described as “casual” employment;
- Whether the person will be entitled to casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument.
Your casual employment contracts need to capture each of these elements and make it clear that the parties intend to keep it casual (well, for at least 12 months, anyway). After the 12 months has passed, you may also have an obligation to offer your casual employees permanent work.
Okay, so what’s next?
The Fair Work Ombudsman has prepared a Fair Work Casual Employee Information Statement (“CEIS”) that employers are obliged to provide to every casual employee. You can grab a copy here. This needs to be done ASAP for employers with fewer than 15 employees, and as soon as possible after the 27th September 2021 for all other employers. The CEIS must also be provided to all casual employees alongside the Fair Work Information Statement.
So there you have it. Employers and employees can now keep it casual with an added layer of certainty. It’s about time we could have our cake and casually eat it, too.
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