Big Changes to Casual Employment: What Your Business Needs to Know
Changes to casual employment laws are on the horizon, and it is important for employers to understand what this means for their workforce. Until 26 February 2025, the current casual employment arrangements remain in place. However, from that date onwards, the rules surrounding casual employment will shift significantly with the introduction of the Employee Choice process.
Current Casual Conversion Rules (Until 26 February 2025)
For now, employers must continue to offer conversion to full-time or part-time employment to casual employees who were employed before 26 August 2024 and have reached 12 months of service, provided they meet the specified criteria. This requirement remains in effect until 26 February 2025.
What Happens from 26 February 2025?
After this date, the old casual conversion process will no longer apply. Instead, the new Employee Choice process will take effect, which allows casual employees to notify their employer if they wish to become permanent. If a casual employee prefers to remain casual, they can choose to do so and are not required to use this process.
New Definition of a Casual Employee (Effective 26 August 2024)
A key aspect of these changes is the updated definition of a casual employee. From 26 August 2024, an employee is considered casual only if:
- There is no firm advance commitment to continuing and indefinite work, assessed by looking at the real substance, practical reality, and true nature of the employment relationship.
- They are entitled to receive casual loading or a specific casual pay rate.
This means that a single factor—such as what the employment contract states—is not determinative. Instead, the focus shifts to how the employment relationship operates in practice.
Key Considerations for Employers
When determining if an employment relationship has ‘no firm advance commitment to continuing and indefinite work according to an agreed pattern of work,’ the Act specifies that employers must consider:
- Whether the employer can elect to offer work and the employee can reject work.
- Whether the employee works as required according to the employer’s needs.
- Whether the employment is described as casual.
- Whether the employee is entitled to a casual loading under their contract or a Fair Work instrument (such as a modern award).
‘No firm advance commitment’ meaning
Part of the process of determining if an employee is a casual involves determining is there is a firm advance commitment to continuing and indefinite work (as shown above). This involves examining:
- The real substance, practical reality, and true nature of the employment relationship.
- Whether the employer offers or does not offer work to the employee (and if this is happening in practice).
- Whether the employee accepts or rejects work (and if this is happening in practice).
- The likelihood of future work being available based on the nature of the business.
- Whether full-time or part-time employees perform similar work within the business.
- Whether the employee has a regular pattern of work, even if it varies over time.
Importantly, no single factor will determine whether an employee is casual. For example, having a regular pattern of work alone does not mean an employee is permanent if there is no firm advance commitment to ongoing work.
What This Means for Your Business
Given these changes, it is essential to review your employment practices and casual workforce arrangements. Consider:
- How these new definitions impact your casual employees.
- Whether any existing casual staff may request permanent employment under the Employee Choice process.
- Ensuring employment contracts and workplace practices align with the new laws.
We encourage our clients to discuss these changes and plan for a smooth transition. If you have any questions or require assistance, our team is here to help guide you through these updates to ensure compliance and best practice in managing your workforce.
If your business is looking for expert HR or employment law advice, the team at EWS is here to help.
Visit EWSOLUTIONS.COM.AU for more information.
Disclaimer: This article provides a summary only of the subject matter without the assumption of a duty of care by Effective Workplace Solutions. No person should rely on the contents as a substitute for legal of other professional advice.