Reminder: Changes to the casual employee framework in effect from 26 August 2024

From 26 August 2024, the definition of casual employee contained in the Fair Work Act 2009 (Cth) (‘the FWA’) has changed.

The new definition of casual employee considers the practical reality of the employment relationship, as opposed to merely the terms in the employment contract.

The new definition of casual employee is as follows:

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

Casual conversion process

Commencing 26 August 2024 the FWA removes casual conversion provisions and replaced it with the “employee choice” pathway.

This pathway provides for an eligible casual employee to notify their employer of their request to convert to permanent or part-time employment if:

• They have been employed for 6 months, or 12 months for small businesses; and
• They no longer consider themselves a casual employee under the new definition in effect from 26 August 2024.

Importantly, employers will no longer be obligated to offer conversion after August 26, 2024 (February 26, 2025, for small businesses).

An employee’s status will only change from casual to permanent if they request it.

Responding to an Employee Notification

Employers will have 21 days to respond to an employee’s notification to convert their casual employment status. Employers must either convert the employee to full-time or part-time employment or provide reasons for not accepting the request. Employers can refuse the request on specific grounds, including:

• The employee still meets the Fair Work Act’s definition of a casual employee, or
• There are fair and reasonable operational grounds.

Fair and reasonable operational grounds

While the new laws are yet to be fully tested, examples of fair and reasonable operational grounds might include:

• Substantial changes required in how the employer’s business is organized,
• Significant impacts on the operation of the employer’s business, or
• Substantial changes to the employee’s employment conditions necessary to comply with rules, such as those in an award or agreement.

The Fair Work Commission’s jurisdiction have been extended to deal with disputes relating to casual conversion, including to mandate arbitration to determine if an employer had reasonable grounds to refuse a casual conversion request.

Need more?

Still not sure of your obligations or need further guidance on the casual conversion changes? The Workplace Relations and Legal Team are here to help and support you, reach out on 02 6175 5900.