Closing Loopholes and Casual Employees

By Chloe Boike, Workplace Relations Advisor, Business Chamber Queensland

Changing Definition

In 2021, the definition of a casual employee was included in the Fair Work Act 2009. A casual employee was to be determined by the offer of employment and not any subsequent conduct of the employer or employee. This will likely change in the coming months. The Fair Work Legislation Amendment (Closing Loopholes No.2) Bill 2023 is looking to amend the definition of ‘casual employee’ within section 15A of the Fair Work Act 2009.

It is proposed in the legislative amendments that the definition of ‘casual employee’ be made ‘fairer’, so the reality of the employment relationship is relevant to the definition of the employee, and not only the contract offered. What this means for businesses is – in addition to the previous casual conversion process in the National Employment Standards, there will also be a new employee-driven pathway to convert from casual to permanent employment.

The Fair Work Act 2009 will retain the concept that casual employees have no firm advance commitment to continuing and indefinite work as well as casual employees being entitled to casual loading or specific rates of pay under the relevant industrial instrument.

When assessing whether there is a firm advance commitment to continuing and indefinite work, both employers and employees must consider:

• The ability and actual practice of offering and accepting (or rejecting) work.
• Whether continuing work is reasonably likely to be available.
• Whether part-time or full-time employees are undertaking similar roles.
• Whether the employee has a regular pattern of work.

A regular pattern of work does not in itself suggest a firm advance commitment to continuing and indefinite work as no single consideration can determine whether an employee is considered to be a casual or not.

Employee-driven casual conversion

Employees with 6 months of service (or 12 months in a small business) will be able to choose to notify their employer if their working arrangements have changed and whether they feel their employment no longer meets the definition of ‘casual employment’. This employee choice pathway allows employees to initiate the conversion process from casual to permanent and the existing employee request process will be repealed. Employers (not including small businesses) will, however, still be required to consider a casual employee’s employment status after 12 months of service and offer casual conversion to employees who are eligible, or provide suitable reasons not to offer the conversion. 

Casual employees will not be forced to become permanent, even if their employment relationship suggests such. Conversion from casual to permanent will only occur if the employee desires it. If employees are effectively working like a permanent employee, they will have a clear and simple way to convert to permanent employment should they choose to. Casual employees who convert to permanent employment will no longer be entitled to casual loading but will receive paid leave and job security like all other permanent employees. The change in status will be forward-looking with no backpay for permanent employee entitlements if the employee is correctly classified at the start of their employment. 

Other changes

The proposed change will mean the Fair Work Ombudsman will update the Casual Employment Information Statement. All employers will need to continue providing the Casual Employment Information Statement to employees as soon as practicable. A new obligation will be implemented for employers to provide the Casual Employment Information Statement to casual employees again after 12 months of employment. This is to ensure employees are reminded of their rights and ability to convert to permanent employment. 

The proposed change would also: 

• Expand existing anti-avoidance provisions by preventing an employer from changing an employee’s pattern of work in order to avoid any right or obligation under the employee choice or casual conversion provisions. 
• Permit the Fair Work Commission to arbitrate disputes concerning the new employee choice provisions as well as the existing casual conversion provisions, without the agreement of the parties involved. 
• Introduce new offences regarding the misrepresentation of the employment relationship, dismissing an employee in order to engage them as a casual employee, and making misrepresentations to engage an individual as a casual employee.  

What's next for business?

If the proposed amendments are passed, the provisions regarding casual employees will likely take effect from 1 July 2024.  

Before the changes are implemented, Business Chamber Queensland recommends that employers consider the following actions, and review their: 

• Existing casual arrangements to assess the risk as to whether their employees are permanent; 
• Casual employment contracts to ensure they are a) in place, and b) are sufficient given the proposed amendments to casual employment; 
• Processes for determining whether an employee can be engaged as a casual; and 
• Casual conversion processes, and how to assess when a casual employee may no longer being casual. 

Business Chamber Queensland will update its members on any further developments as necessary. If you would be interested in attending a webinar on the proposed changes to casual employment, register your interest here. Members as well as non-members wanting to know more are encouraged to express their interest. 

If you have any questions or concerns about the upcoming amendments of the Fair Work Legislation Amendment (Closing Loopholes) Act 2023, or would like to know more about the resources available to members, please contact the Workplace Relations on 1300 731 988 or at [email protected]