2021 Fair Work Act changes to casual employment
If your business has any casual employees, chances are that you will be affected by the recent amendments to the Fair Work Act 2009 which drastically changed the laws around casual employment. The changes came into effect on 27 March 2021.
We break down your rights and obligations under the new laws so that you can protect your business.
New definition of ‘casual employee’
If you are not sure whether any of your employees are a causal employee, the Fair Work Act 2009 contains a definition of ‘casual employee’ which can help you determine this.
A casual employee is a person who accepts a job offer from you (the employer) on the basis that you do not make any firm advance commitment to continuing and indefinite work according to an agreed pattern of work.
Essentially, this means that if you employed someone on the basis that their employment was not on a continuing or permanent basis and without regular hours, it is highly likely that they are a casual employee.
What you need to do now for existing casual employees
By 27 September 2021, you must assess whether any of your existing casual employees who were employed before 27 March 2021, are eligible to be offered to convert to permanent employment. If you determine that any of your casual employees are eligible, you must make an offer within 21 days after completing the assessment unless one of the exceptions apply.
To summarise, your assessment must consider the following:
has the employee been employed for over 12 months?
has the employee worked a regular pattern of hours on an ongoing basis for the last 6 months?
could the employee working these hours (as a full-time or part-time employee) without significant adjustments?
Your obligation to offer permanent employment
Going forward, you must offer your casual employees the option to convert to permanent employment if they meet the eligibility criteria. The criteria are that the employee:
has been employed by the employer for 12 months
has worked a regular pattern of hours on an ongoing basis for at least the last 6 months
could continue working these same hours (as a full-time or part-time employee) without significant adjustments.
If the above criteria are met, the offer must be made in writing within 21 days of the 12 month anniversary. This also means that if a casual employee does not meet all of the above criteria, you are under no obligation to make any offer. If you have any existing causal employees who meet the eligibility criteria, please see the next section below about what you need to do.
For casual employees who meet the eligibility criteria, if the employee worked hours equivalent to full-time hours over the last 6 months, the offer must be for permanent full-time employment. Similarly, if the employee worked hours less than full-time hours over the last 6 months, the offer must be for part-time employment.
There are two circumstances under which you do not have to make an offer, even if a casual employee meets the eligibility criteria.
Firstly, you do not have to make an offer if you have reasonable grounds. Reasonable grounds include:
the employee’s position ceasing to exist
the employee’s hours significantly reducing
the employee’s working days will change significantly
non-compliance with a recruitment or selection process required by law
Secondly, you do not have to make an offer if your business is a small business employer. A small business employer is an employer with less than 15 employees.
What if your employee does not accept the offer?
If you make an offer to an eligible casual employee, they do not have to accept the offer and continue to remain as a casual employee. They may have legitimate reasons to do so such as impacts on their pay and flexibility.
How we can help
We can help you carry out the assessment and guide you through the process. We can also draft a formal letter of offer or notification of refusal based on reasonable grounds.
Contact us now for a quick fixed-fee quote.