Changes have been made to the Fair Work Act 2009 which may impact how you employ and manage casual Employees and you have until 27 September 2021 to put new processes in place.
- The key changes have been summarised into the following areas:
- Changes to the definition of ‘Casual Employee’
- What do I need to do about these changes?
- The new ‘Casual Employment Information Statement’
- The process I now need to follow to convert Casual Employees to Permanent
- What to do if I am a small business (less than 15 Employees)
The Fair Work Act (FWA) amendments now provide for a clear definition on when a person is a Casual Employee, most importantly, this will apply to former, current and future Employees. A person will be a Casual Employee if you offer them a job which does not include a firm advance commitment that the work will continue indefinitely with an agreed pattern of work, and the person accepts the job knowing there is no firm advance commitment.
A ‘Firm Advance Commitment’ is when an Employee has been offered a job and, at the time of engagement, has been asked to work on certain days, at certain times every week, and is expected to show up and rely that the schedule won’t change.
A ‘Casual Arrangement’ is when it is intended, at the time of engagement, that the person will only be offered shifts intermittently and the shifts will likely vary in hours or days, and the Employee has the right to refuse any shift.
Other factors come into play to determine if someone is a true Casual Employee including whether the person will work as required according to the needs of the Employer. The employment is described as Casual Employment, and whether the person will be entitled to a casual loading or a specific rate of pay.
The new ‘Casual Employee’ test means that if an Employee’s employment satisfies all of the identified factors, then they will be a ‘Casual Employee’ until their employment is either converted in accordance with the new casual conversion process or at some later stage an offer of alternative employment is made for a permanent full-time or part-time position.
What Do I Need to Do?
- Review your current casual arrangements and apply the new ‘Casual Employee’ test. It is needed to take into consideration available documents from the offer of employment for each
- These may include the first contract of employment, offer letters, job advertisements, file notes of the interview offer meetings and email exchange with regards to the offer.
- This is important – you need to be keeping records. Most of you believe that you can destroy documents after 7 years. In relation to Employee arrangements, you must keep everything, regardless of the time frame. Any documentation will be important and act as evidence.
- If an Employee does not meet the new ‘Casual Employee’ test, your business may have a residual and ongoing risk according to the new changes. This could mean a casual Employee may be seen as a permanent Employee in the eyes of the law and entitled to back payment of certain entitlements.
Future/Prospective Casual Employees
- Review your hours of work needs for future casual Employees, to determine whether you need casual Employees (with no firm advance commitment to hours and an ability to accept or reject work), or whether you need part-time or full-time Employees.
- Consider a review of your casual employment contracts, to ensure they adequately reflect your offer of true casual employment.
- Check to see if you have a casual employment agreement that satisfies the new rules? If not, we strongly suggest reviewing them and putting a new casual employment agreement in place to better protect your business.