When is a casual employee really a casual?

The Fair Work Amendment (Closing Loopholes No. 2) Act 2024 comes into effect on the 26 August 2024, a year later if you’re a small business. This is a significant change that employers need to be aware of and prepare for, when engaging casual employees.

What’s changing?

The most significant change is to the definition of a “casual employee”. The current definition places the employment contract at the heart of the casual employment relationship. The new definition shifts the focus to the intention of the parties in the employment relationship.

The old and the new

? Employement offer made on the basis of no firm commitment to ongoing work.

? Employment relationship characterised by the absence of a firm commitment to ongoing work.

? Offer of employment accepted on that basis.

? Person becomes an employee on the basis of that acceptance.

? Employee is entitled to a casual loading or specific rate of pay under a award, enterprise agreement or contract.

What does this all mean?

It’s probably going to take some time to work this out. This is what we know now.

If you engage a “casual” employee on a casual employment contract but immediately place that employee on a defined and ongoing roster and the employee does not have the ability to accept or reject the work, they do not meet the new definition of a casual employee as there is a commitment to ongoing work.

This is a significant change that you need to carefully consider. In my experience, employers regularly engage casual employees with the intention of that employee filling regular and ongoing lines on a roster.

Now you must consider the reality of how the employee ends up working regardless of what their employment contract says. This is the intention of the employment relationship.

What other factors do you need to consider?

~??????? Is it your intention to choose to offer or not offer work?

~??????? Can the employee accept or reject the work offered?

~??????? Will continuing work performed by the casual employee be available in the future?

~??????? Are there full-time and part-time employees doing the same kind of work?

~??????? Will the employee perform a regular pattern of work?

It is worth noting that not all the above factors need to be met for an employee not to meet the definition of a casual employee.

Which casual employees are impacted by this change?

~??????? Casual employees engaged on or after 26 August 2024 fall under the new definition of casual employees.

~??????? Casual employees engaged prior to 26 August 2024 fall under the current definition of casual employees if they the meet the current definition.

What do you need to do to prepare for this change?

~??????? Update your casual employment contract templates to ensure they reflect the new definition of casual employees under the Act.

~??????? Ensure your casual employment contracts clearly stipulate the payment of a casual loading.

~??????? It is preferable to articulate the casual loading in dollars rather than a percentage.

~??????? Why? If a claim is made by your employee for part-time or full-time employment status in the future, you may need to calculate a compensation payment. This makes it an easier process.

~??????? Ensure your hiring managers are trained on the new definition and how it impacts the recruitment process (more on this below).

~??????? Update your interview questions to accurately reflect the intention of the parties at the point of hire as this is a relevant fact in determining the employment relationship.

?Why is the recruitment process impacted by this change?

A: If, during the recruitment process, the hiring manager indicates to a candidate that there will be regular and ongoing work available into the future, the operational reality or the true intention of the employment relationship is not a casual one.

If challenged, the Fair Work Commission will look at the intention of the parties, and in this instance, the intention of the employer was for ongoing regular work.

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If you need help ensuring you are ready for the new definition of casual employment, send me a DM.

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