Employment types concept illustration

Government passes new legislation regarding “casual” employment

Over the past month or so the media has been saturated with reports concerning the Federal Government’s attempts to pass its workplace relations reforms in legislation known as the “Omnibus Bill.”

REEF can report that the Bill has now passed both houses of Parliament, albeit in a revised and significantly reduced form.

Whilst key aspects of the Bill were jettisoned, the passing of the Bill remains a landmark development as it reforms a substantial and often problematic feature of our workplace relations system – casual employment.

What are the key changes introduced by the legislation?

1. The introduction of a statutory definition of “casual employee”

For the first time, we now have a definition of casual employment inserted into the Fair Work Act.  A person will be considered a “casual” if they are offered employment without a “firm advanced commitment to continuing and indefinite work” and the person accepts that offer.

2. Right to casual conversion

The second key change is the inclusion of a casual conversion mechanism. Except for small business employers, employers must offer to convert a casual employee to permanent employment if the employee:

1. has been employed for 12 months; and

2. during the last 6 months, has worked a regular and systematic pattern of hours without significant adjustment.

Small business employers (i.e. with less than 15 employees) are not obligated to make this offer.  However, employees of small business are still entitled to request conversion from casual to permanent status and employers should consider this request in line with their operational requirements and must only decline the request on reasonable business grounds.

3. New Casual Employment Information Statement

The Fair Work Ombudsman is required to create a new “Casual Employment Information Statement” that is to be provided to each casual employee when they start employment with their employer.

REEF will inform members when this new “Casual Employment Information Statement” is available and it will be placed on our People Management System for download.

4. Casual loading offset created

Where an employee is found to have been incorrectly engaged as a casual (that is, they are at law a permanent employee), there is an express right for employers to offset any leave entitlements owed to the employee against the casual loading paid to the casual employee.

What members should do next?

Members might look at introducing new casual contract that align with the recent amendments as well as introducing processes for dealing with casual conversion that ensure their operational requirements are considered whilst simultaneously ensuring compliance with the Fair Work Act.

These revised Employment Agreements can be found on the REEF People Management System.