The Federal Government’s most recent tranche of employment law changes (the Closing Loopholes Bill No 2) has now received Royal Assent, with several of the provisions now in effect.

These significant changes include several important changes relating to casual employment.

Changes to the definition of casual employment

The new definition of casual employment re-shifts the focus from the terms of a contract of employment, back to the practical reality of the employment relationship.  From 26 August 2024, casual employment will be defined by the Act as:

• the employment relationship being characterised by an absence of a firm advance commitment to continuing and indefinite work; and
• the employee being entitled to a casual loading or specific rate of pay for casual employees under the terms of a fair work instrument or contract of employment.

When assessing whether there is a “firm advance commitment to continuing and indefinite work” regard has to be had to the “real substance, practical reality and true nature of the employment relationship”, not just the employment contract.  The factors that will generally be to be taken into consideration include:

• Whether there is an inability of the employer to elect to offer, or not offer, work or an inability of the employee to elect to accept or reject work.
• If it is reasonably likely that there will be future availability of continuing work in the enterprise, given the nature of the business.
• Whether there are full-time or part-time employees performing the same kind of work.
• Whether there is a regular pattern of work for the employee.

These changes will mark a shift back to the prior legal position where the substance of the relationship will be more important than its documented terms.

Changes to Casual Conversion

The changes also introduce a significant shift in the process of casual conversion.  Whereas it is currently the responsibility of the employer to review a casual employment relationship after 12 months and offer permanent employment where appropriate, from 26 August 2024, employees will now initiate the transition to permanent employment, being able to give notification to their employer after six months of ongoing employment, or 12 months in the case of small businesses.

This “employee choice” pathway puts the onus on employees to request a change in their employment status.  The process after request is similar to the existing requirements, in that employers will be required to respond to written notification from casual employees within 21 days after the notification is given to the employer.  The employer may refuse the employee’s request if:

• the employee meets the definition of a casual employee;
• there are fair and reasonable operational grounds for not accepting the notification; or
• accepting the notification would result in the employer not complying with recruitment or selection processes required by Commonwealth, State or Territory laws.

An employer is required to consult with a casual employee before making a decision in respect of a request.

There are also important changes to employer’s obligation to provide a Casual Employment Information Statement (the “CEIS”). Once the changes are in force employers will need to provide a casual employee with a CEIS:

• Before or as soon as possible after the employment commences.
• Again, as soon as practicable after 6 months of employment.
• Again, as soon as practicable after 12 months of employment.
• Again, as soon as practicable after each further 12 months of employment.

The changes also introduce anti-avoidance provisions to ensure casual employees are not improperly engaged.  This includes protections that ensure the employer cannot:

• Dismiss, or threaten to dismiss, an individual in order to engage the individual as a casual employee to perform the same, or substantially the same work.
• Make a statement that the employer knows is false and is made in order to persuade or influence the individual to enter into a contract for casual employment under which the individual will perform the same, or substantially the same, work for the employer.