Closing Loopholes No. 2

The latest round of Closing Loopholes commenced this month on 26 August 2024.

The Fair Work Legislation Amendment (Closing Loopholes No 2) Act 2024 is the gift that keeps on giving.

Casual Employment Changes

The Act now includes a definition of what is a 'casual employee'’ in the Fair Work Act 2009 (Cth) (FW Act). A casual employee is only if:

• the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work and
• the employee would be entitled to a casual loading or a specific rate of pay for casual employees under the terms of a fair work instrument if the employee were a casual employee, or the employee is entitled to such loading or rate of pay under the contract of employment.

Multiple indicia can be taken into account, but casual employees remain casual until the occurrence of a specified event (for example, when they are converted to full- or part-time employment under the FW Act).

Under the new laws, the FW Act will provide for a single 'employee-driven' conversion process by which a casual employee who has worked for at least six months (or 12 months for a small business) can apply to become an ongoing employee.

A casual employee can remain casual; yes, an employer may also refuse full-time or part-time employment requests on reasonable business grounds. Note that casual employees of small businesses will be able to access a conversion process from 26 August 2025; however, employees of non-small businesses can access a conversion process from 26 February 2025.

We consider the safest approach is for employers to make regular systematic offers that casual employees can accept or decline with some limited exceptions. In practice, this also narrows the field for management to respond.

Definition of Employment

The Closing the Loopholes Act introduced a new definition of employment in section 15AA of the Fair Work Act 2009 (Cth). Please take note for your higher-paid contractors, including project managers, engineers, estimators, and others on independent arrangements.

Whether an individual is in an 'employment relationship' with a person under new section 15AA of the Fair Work Act 2009 (Cth) is to be determined by ascertaining the 'real substance, practical reality and true nature of the relationship'. For the purposes of ascertaining the real substance, practical reality and true nature of the relationship between the individual and the person, including the totality of the relationship, with regard to the terms of the contract with other factors including, but not limited to, how the contract is performed in practice. However, workers earning above a 'contractor high-income threshold' (currently $175,000 in August 2024) will be able to give notice to elect or 'opt out' of the new definition of employment.

For questions about casual employees and the definition of employment or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 0417 622 178, 1300 WAL LAW or via email to [email protected]

Disclaimer: This information is provided as general advice on workplace relations and employment law. It does not constitute legal advice, and it is always advisable to seek further information regarding specific workplace issues. Liability limited by a scheme approved under professional standards legislation.