As of 26 August 2024 (or 25 February 2025 for small business employers with fewer than 15 employees), a new definition of a casual employee will apply in the Fair Work Act 2009. Here’s a summary:
- They receive a casual loading or a specific casual pay rate. Casual employees are not entitled to paid annual or paid personal (sick)/carer’s leave. Instead, they receive a casual loading (usually 25%), an additional percentage added to the ordinary hourly rate of casual employees to compensate for the lack of these entitlements.
- There is no firm advance commitment to continuing and indefinite work, considering the actual nature and practical reality of the employment relationship with the casual employee (considering factors such as having a regular roster and whether the casual employee can reject shifts).
The new definition of casual employment shifts the focus to the practical reality of how the casual employee is engaged. This means that rejecting a casual employee’s request to become permanent will be more complex since employers can no longer solely rely on a contract to establish casual status.
Employers must also consider any existing rules concerning casual employment in an enterprise agreement or award.
New rules for casual conversion to permanent employment
Casual conversion will now move to an ’employee choice’ model, replacing the current rules for changing to permanent employment. One of the most significant changes from the new legislation is removing employers’ obligation to initiate casual conversion.
Starting from 26 August 2024 (or 26 February 2025 for small business employers with fewer than 15 employees), casual employees will be able to notify their employer of their intention to change to permanent employment if they:
- have been employed for at least six months (or 12 months if working for a small business employer) and
- believe they no longer meet the new casual employee definition requirements.
Once a request is made, employers must provide a written response within 21 days. Under the new laws, employers must understand what constitutes reasonable grounds to refuse a request.
Small business employers (with less than 15 employees) will still need to follow the existing rules for casual employment but should take steps to prepare for the new rules in 2025.
The Fair Work Casual Employee Information Statement
From 26 August 2024, employers must provide the Casual Employee Information Statement (CEIS) to all casual employees at the following timeframes:
- when the employee is hired (in addition to the existing Fair Work Information Statement)
- after six months of employment (six months after their hire date)
- after 12 months of employment and
- every 12 months after that.
Small business employers (with less than 15 employees) must provide the CEIS to casual employees on commencement and every 12 months after that. Employers can issue the CEIS in person, by email, by emailing a link to the CEIS available on the employer’s intranet, or by another method.
Committees and employers can download the Casual Employee Information Statement (CEIS) at https://www.fairwork.gov.au/.
Penalties for Non-Compliance
Employers now face significant civil penalties (up to $93,900 for individuals and $469,500 for body corporates) for contraventions of the Fair Work Act, such as misrepresenting employment as casual or dismissing or threatening to dismiss an employee with the plan to re-engage them as a casual employee.
Questions about engaging casuals?
Further information on casual employment is available on the Fair Work Ombudsman’s website at https://www.fairwork.gov.au/
