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Employment Law Update: What does the new law regarding casual employment mean for employers?

Employment Law Update: What does the new law regarding casual employment mean for employers?

Published on April 16, 2021 by Janine Smith, Peter Punch and Wing Ho | 何宛穎律師Janine Smith, Peter Punch and Wing Ho | 何宛穎律師

On 27 March 2021, the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 (Cth)) (“the amending Act”) came into effect, which tightens the regulation of casual employment under the Fair Work Act 2009 (Cth).  This article summarises the main changes brought about by the amending Act and the significance of these changes for employers.

Summary of Key Changes

1. Definition of “casual employee” – the main feature of this definition is that there must be an absence of “firm advance commitment”. However, there are important qualifications:

a. Only the following considerations can be taken into account when determining whether there is an absence of “firm advance commitment”:

(a)  whether the employer can elect to offer work and whether the person can elect to accept or reject work;

(b)  whether the person will work as required according to the needs of the employer;

(c)  whether the employment is described as casual employment;

(d)  whether the person will be entitled to a casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument.

b. A regular pattern of hours alone does not indicate a “firm advance commitment to continuing and indefinite work according to an agreed pattern of work”.

c. The question of whether a person is a casual employee “be assessed on the basis of the offer of employment and the acceptance of that offer, not on the basis of any subsequent conduct of either party”.

d. A casual employee will remain a casual employee until either event occurs:

i. their employment has been converted to full-time or part-time employment; or

ii. they accept an alternative offer of employment (which is other than casual employment).

2. “Casual conversion entitlement” introduced into the National Employment Standards (NES) – if a casual employee has been employed for a period of 12 months and has been working a regular pattern of hours in the last 6 months, an employer must make an offer to the casual employee to convert to full-time or part-time employment, unless the employer has reasonable grounds for not doing so. However, small business employers are exempt from this obligation.  Casual employees will have a residual right to request conversion, as long as certain conditions are met.

3. Offsetting casual loading against claims for leave and other entitlements – where a person is purportedly employed as a casual employee but is later found not to be one in the eyes of the law, then the Court must make an order reducing the compensation by an amount equal to the loading amount, if an identifiable loading has been paid to the employee.

4. Employers are required to provide a copy of the Casual Employment Information Statement to new casual employees, and also to existing casual employees hired prior to 27 March 2021.


Implications for Employers

1. For the first time, there is a statutory definition of “casual employee” in the Fair Work Act. This definition adopts the concept of “no firm advance commitment” as explored in recent Federal Court decisions in Skene and Rossato.[1] However, unlike the decisions in those cases, the new definition excludes reliance by either party on conduct after the initial engagement to determine whether or not there was a “firm advance commitment”.

2. In order to take advantage of the amending Act, employers must get the written form of casual contract correct before they offer it to prospective employees. The amending Act does not specifically require that the terms of the engagement be in written form, but if an employer does not have a well drafted form of casual contract, the risk of uncertainties and arguments afterwards are very real. The Workplace Law team at Carroll & O’Dea Lawyers is able to assist employers in preparing contracts tailored to their situation to ensure that they are enforceable as offers of casual employment.

3. Employers have an obligation to make an offer to a casual employee to convert to full-time or part-time employment, once certain conditions are satisfied. As this obligation is now part of the NES, it is one that cannot be contracted out of or be excluded from an Award or Enterprise Agreement.

If you would like further information or advice about this topic, please contact the Workplace Law team at Carroll & O’Dea Lawyers.


[1] The WorkPac v Rossato Appeal will be heard by the High Court on 11 & 12 May 2021. 

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