Change to Casual Employees

Information all Employers need to know


The Federal Govt last week approved a number of changes to casual employees and a number of other elements to their working relationship with employers

Definition of a casual employee:

If a person is:

  1. offered employment without a “firm advanced commitment to continuing and indefinite work”; and
  2. the person accepts that offer, 

then they are deemed to be a casual employee.

What is firm advanced commitment to continuing and indefinite work?

  • 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; and
  • 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.

If your relationship with your employee does not address all of the above, then they are most likely not going to be considered as a casual employee, under the law.

New rights apply to Casual Employees

The 2nd aspect of the bill is a casual conversion clause.

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. 

There are some specific exclusions to this that should be discussed with your HR representative.

Other points to note;

  • The Casual conversion requirement will not apply to small business employers with less than 15 employees.
  • Where an employee refuses an offer to convert, they no longer hold a right to request conversion at a later date.
  • ALL casual employees will be required to be given a copy of the new Fairwork Casual Employment Information Statement – which will explain the above entitlements to them
  • the Bill also deals with historical problems that have been created where employers misclassify employees as casuals and fail to accrue leave entitlements for these employees. 
    • Where an employee is found to have been incorrectly engaged as a casual (that is, they are at law a permanent employee), the Bill creates an express right for employers to offset any leave entitlements owed to the employee against the casual loading that is often paid to the casual employees. 
    • In order to have the benefit of this offset arrangement, the loading paid must have had components that can be identified as being paid to the employee instead of one or more leave entitlements.
    • To this point, it is highly suggested that payslips, contracts or agreements clearly identify that a casual loading is paid, how much that loading is (that is preferable as a separate amount or line on a payslip)

What should Employers do now?

Now is the time for Employers to review and if necessary clean up any of their casual arrangements.

They should be looking to:

  • Introduce new contracts that align with the amendments
  • Consider and identify staff to be offered casual conversion and put in place a process to achieve this

The Fairwork Casual Information statement will be available for Employers on their website soon.

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