keeping it casual(ish): part 1.
there’s a new definition of ‘casual employee’ from August 2024.
tldr:
There is a new definition of a ‘casual employee’, which will take effect from 26 August 2024 🗓️.
The practical reality and true nature of your relationship with a casual employee (despite any contract between you) will be taken into account moving forward.
what is the new definition?
From August, the new definition of a casual employee will focus on the nature of the employment relationship you have with your casual employees, not just your employment contract.
One way to wrap your head around this, is to compare the current definition with the new one 👇🏼:
In case you’re not a wiz at legislative interpretation, let’s break it down into simple terms. An employee will only be a casual employee if:
there is not a firm advance commitment to continuing and indefinite work; and
and the employee receives a casual loading or specific casual pay rate.
You will have noticed that the words “according to an agreed pattern of work” have been removed, which makes the definition much broader than before (potentially opening up characterisation of casual employment to more employees).
how will the relationship be assessed?
The relationship will now be assessed based on whether or not there is a firm advance commitment of continuing work by having regard to:
the real substance, practical reality and true nature of the employment relationship;
and the mutual understanding or expectation between you and the employee (whether there is a contract in place or not).
Any assessment of the above will take into account these factors 👇🏼:
whether there is an inability for you to elect to offer, or not offer, work or an inability of the employee to elect to accept or reject work (and whether this occurs in practice);
whether it is reasonably likely that there will be future availability of continuing work in the context of your business;
whether there are full-time employees or part-time employees performing the same kind of work that is usually performed by the employee;
whether there is a regular pattern of work for the employee.
The above factors will not be exhaustive either.
Interestingly, a note in the new section provides that an employee who has a regular pattern of work may still be a casual employee, even where there is no firm advance commitment to continuing and indefinite work.
Here’s a simplified breakdown:
what about casual conversion?
Employees who start as a casual, will stay casual until their employment status changes either through:
a conversion process (we will focus on this more in ‘part 2’ of this series - click here to read more);
a Fair Work Commission order; or
accepting an alternative employment offer and starting work on that basis.
Employees who were employed casually before 26 August 2024, will stay casuals under the new definition unless they transition to permanent employment via one of the above avenues.
how you can prepare for the new definition.
📝 Our top tips are to:
Keep things simple. A true casual is a ‘gap filler’ to be used around permanent staff or temporary/seasonal work. Don’t blur the lines as your conduct and the reality of the relationship may undo anything you think you’ve agreed on in a casual employment contract. If you get stuck, seek advice.
Review your employment contracts and casual offer letters to ensure the relationship is framed as that of casual employment, for example:
the contract does not make provision for guaranteed work/work for an indefinite period; and
you’re clear about the casual rate/loading paid (and it’s separately identifiable).
Review your casual on-boarding communications and processes to ensure there is one consistent narrative. This will all go to demonstrating the intention of the relationship.
There is a lot here, and it’s complex.
Reach out if you would like to chat this through.
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This information has not been prepared with your specific circumstances in mind, and may not be suitable for your business. This information is provided for your reference only and does not constitute the provision of legal advice or other professional advice by in house nous. By relying on any information on this website, you assume all risk and liability that may result.
