By Mehmet Musa

Time has flown and now that we’re rapidly approaching the end of the year, things only seem to be getting busier for businesses. It’s now been more than a year since the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2021 (Bill) passed Parliament in March 2021 giving employers greater clarity on what defines casual employment. This change also imposed a statutory mechanism for casual conversion, which left many large employers scrambling to meet their obligations to offer casual conversion to eligible employees by 27 September 2021.

In this article, I look at how these changes have impacted contracts for new casual employees, why details matter when it comes to continuing and indefinite work, and what this all means for employers going forward.

1. Impact on contracts for new casual employees

Now that the transitional period has ended, employers need to be aware of what makes a worker a lawful casual employee at first instance. This is important as it helps avoid the risk of underpayment claims against employers for not providing employees with the legal entitlements a permanent worker is entitled to under the Fair Work Act 2009 (FW Act).

The FW Act now confirms that the question of whether someone is a casual employee is to be assessed based on the offer of employment and the acceptance of that offer, and not based on any subsequent conduct of either party. As such, employers need to ensure that the offer of employment is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the employee. The employee must accept the offer on that basis and be an employee because of that acceptance.

This clarification of what deems an employee a casual employee makes the original employment contract vital, and the subsequent working patterns of that employee less so. 

2. The devil is in the detail: no firm advance commitment to continuing and indefinite work

Employers need to be careful when drafting offers of employment for prospective casual workers to ensure the offer cannot be interpreted as a firm advance commitment to continuing and indefinite work according to an agreed pattern of work. The FW Act sets out the only criterion that may be considered when determining this:

  1. whether the employer can elect to offer work and whether the person can elect to accept or reject work;
  2. whether the person will work as required according to the needs of the employer;
  3. whether the employment is described as casual employment; and
  4. whether the person will be entitled to a casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument (for example, a modern award or enterprise agreement).

As such, an employee that’s hired on the basis that they’re to receive the same shifts on the same days for an indefinite period could be interpreted by the Courts as not a casual employment relationship. In contrast, merely offering your employee a regular pattern of hours for a short period such as over Christmas, will likely not meet the threshold and this employee is more likely to be deemed a casual worker under the FW Act.

Further to this, the High Court’s verdict in WorkPac Pty Ltd v Rossato [2021] HCA 23 confirmed that a roster of itself may not be sufficient to form a firm advance commitment where the employee and employer both had the genuine ability to remove and change shifts according to their needs. As such, the Court placed heavy emphasis on the worker’s ability to refuse shifts when determining that they were a casual worker which is consistent with the current legislation.

3. What does this all mean?

Employers need to be mindful of the new standard definition of ‘casual’ when offering employment. Whilst the new definition provides clarity in what defines a casual employee under the FW Act, the way an employer drafts their offer/contract will often be pivotal in determining whether their employee is deemed a casual or permanent worker, which is why it’s so important to ensure that your contracts are up-to-date, comprehensive, and have been recently drafted or reviewed by a professional.

Need extra help?

If this article has raised any questions for you about casual conversion and what it means for your business, please reach out to our employment law experts via our 24/7 Telephone Advisory Service.

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Mehmet Musa is a Workplace Relations Advisor at HR Assured. He has a particular interest in retail industry compliance and meeting the diverse needs of clients within an evolving legal framework. Mehmet regularly provides advice on workplace matters to assist clients.