Are your employees less casual than they used to be?

May 23, 2023

Determining if an employee is a casual employee (or if they are in fact actually a part-time or fulltime permanent employee) is important to ensure the correct employment standards have been applied.

Definition of ‘casuals’

In 2021 legislation was passed which implemented a definition of a ‘casual’ that centres on the nature of the initial offer of employment and whether there is a ‘firm advance commitment’ to ongoing work by the employer.

To work out if there is a ‘firm advance commitment‘ only the following factors can be considered:

1. whether the employer can elect to offer work and whether the person can elect to accept or reject the work;
2. whether the person will work only 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 any casual loadings or a specific casual rate of pay under the offer of employment or a Fair Work instrument.

Incorrect Classification and Offset Provision

In the past there have been cases where an employee was incorrectly classified as casual, which resulted in the employer having to back-pay permanent entitlements in addition to the casual loading already paid. The legislation now deals with this issue of “double dipping” among incorrectly classified casuals, as it includes a provision to offset permanent entitlements (e.g. annual leave) against casual loading rates already paid. It should be noted that for the offset to apply, these entitlements must be explicitly identified in the employment contract.

Casual Conversion

Unless there are reasonable grounds not to do so, employers (other than small business employers which is an employer who employs fewer than 15 employees) are required to offer to convert any casual employee to full-time or part-time employment if the employee:

• has been employed for at least 12 months; and
• for at least six of those 12 months, has worked a regular pattern of hours on an ongoing basis that, without significant adjustment, could continue to be worked as a part-time or full-time employee.

Casual employees also have a right to request conversion to full or part-time employment themselves. Employers can only refuse such requests on reasonable grounds and must respond in writing within specified timeframes. Some examples of reasonable grounds of refusal are:

• the employee’s position will cease to exist in the period of 12 months after the time the employer decides to not make the offer;
• the employee’s hours of work will be significantly reduced in that 12 month period;
• there will be a change in the days or times in which the employee’s hours of work are required to be performed; or
• making the offer would not comply with a recruitment or selection process required by law.

There is also an obligation to consult with the employee before refusing any request.

For more information contact our Business Services team.