2021 Changes to the Fair Work Act

The Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2021 has been passed through Parliament and came into effect on 27 March 2021. 

The bill amended the Fair Work Act 2009 (Cth) (“Act”) by implementing several reforms, including:

  • the introduction of a definition for ‘casual employee’;
  • the introduction of an ‘Casual Employee Information Statement’;
  • the introduction of a pathway for casual employees to move to full-time or part-time permanent employment; and
  • the introduction of a mechanism for setting off casual loading against claims for paid National Employment Standard (NES) entitlements. 

Defining ‘casual employee’ 

Section 15A of the Act sets out that a person is a casual employee where: 

  • there is an offer of employment made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work;
  • the person accepts the offer on that basis; and
  • the person is an employee as a result of that acceptance.

The employee will continue to be a casual employee until they become a permanent employee, or cease to be employed.

A casual employee can become a permanent employee either through casual conversation (see below for more info), or if they are offered a position of part-time or full-time permanent employment and accept that offer. 

Persons who were employed immediately before 27 March 2021 and whose initial employment offer meets the new definition will continue to be casual employees under the Act. 

Exceptions to this rule apply in situations where an employee is either found by the court to not be a casual employee, or has converted to an employment basis other than casual under the Act or contract of employment. 

Casual Employment Information Statement 

Employers now have an obligation to give every new casual employee a Casual Employment Information Statement (“CEIS”) before or immediately after the new employees begins employment. 

The CEIS will inform casual employees of their new rights and entitlements to pursue casual conversion. 

If you are a small business owner, you will need to give your casual employees a copy of the CEIS as soon as possible after 27 March 2021. 

All other employers will be required to give their existing casual employees a copy of the CEIS as soon as possible after 27 September 2021. 

Becoming a ‘permanent employee’ 

The amendments to the Act implement a pathway for casual employees to obtain full-time or part-time employment through a process called ‘casual conversion’. 

‘Casual conversion’ is a relatively straightforward process whereby an employer is required to offer their casual employee an opportunity to convert to permanent full-time or part-time employment when the employee:

  • has worked for their employer for 12 months;
  • has worked a regular pattern of hours for at least the last 6 of those months on an ongoing basis; and 
  • could continue working those hours as a permanent employee without significant changes.

However, the rules surrounding ‘casual conversion’ do not apply to small business employers (employers with less than 15 employees as defined under section 23 of the Act) and situations where an employer has reasonable business justifications to deny an employee the offer. 

Most employers will have until 27 September 2021 to assess existing employees against the above conversion criteria. They will then be required to offer permanent employment. 

Throughout this period the Fair Work Commission will review all modern awards to ensure that they are consistent with the amended legislation. 

Right to request casual conversion 

Casual employees have the right to request conversion to permanent full or part-time employment where the employee is working for a small business. For other businesses (with 15 or more employees) after 27 September 2021 employees will have the right to make a request for casual conversion if they meet the requisite criteria. The request must be in writing and given to the employer. If an employer is served with a request, they must provide a written response to the employee either granting or refusing the request within 21 days. 

Setting off casual loading

The amended Act introduces a mechanism to offset casual loading amounts paid to an employee against leave entitlements in the event of a claim for unpaid leave entitlements during a period the employee was not a casual employee. This means that employers are protected from providing backpay relating to leave entitlements which the employee would have been entitled to if not classified as casual. This is because the casual loading received by an employee can be offset against any leave entitlements they claim to be owed.

If you require assistance with application of the amendments to the Act to your business, we’re here to help.