Understanding the New Changes in Casual Employment in Australia

Casual employment plays a crucial role in Australia’s workforce, providing flexibility for both employees and employers. However, recent changes in casual employment laws, implemented between 26 August 2024 and 26 February 2025 as part of the “Closing the Loopholes” legislation, aim to enhance clarity and security for all parties involved.  

 This article offers a comprehensive overview of these changes, helping casual workers understand their rights and employers remain compliant.  

What is the New Definition of Casual Employment?

The Fair Work Act now includes a new definition of “casual employee” (w.e.f. 26 August 2024).  A person is considered a casual employee if, at the start of their employment:  

• The employment relationship has no firm advance commitment to ongoing work, considering several factors.  
• They are entitled to a casual loading or specific casual pay rate according to their award, registered agreement, or employment contract.  

 Factors to Assess Firm Advance Commitment:  

• Work Offer: The employer can offer or not offer work to the employee.  
• Acceptance of Work: The employee can accept or reject work.  
• Future Work Availability: Likelihood of future work similar to what the employee usually does.  
• Comparison Pattern of Work: Presence of full-time or part-time employees doing similar work.  
• Regular Pattern of Work: The employee has a regular work pattern, even if it changes due to illness, injury, or other leave.  

It is important to note that not all factors need to be met to determine casual status. The assessment considers the employment contract and any mutual understanding or expectation between the employer and employee.  

Employees classified as casual before 26 August 2024 will remain casual under the new definition until their employment status changes through one of the following ways:  

• Accepting an alternative employment offer and starting work on that basis.  
• Changing to permanent under the rules in the National Employment Standards (NES), their award, or agreement.  
• Through a Fair Work Commission order.  

Casual Employment Information Statement (CEIS)

The Fair Work Ombudsman has introduced a Casual Employment Information Statement (CEIS). This document provides information about employment conditions such as:  

• The definition of a casual employee.  
• How casual employment can be changed, including when an employee can notify their employer that they want to convert to permanent employment.  
• The reasons why an employer may not accept an employee’s notice.  
• The role of the Fair Work Commission in dealing with disputes.  

 Employers must provide this document to all casual employees, outlining their rights and obligations, including the right to request a conversion to permanent employment.  

Pathway to Permanent Employment

One of the most significant changes is the introduction of a clearer pathway for casual employees to convert to permanent employment, either full-time or part-time. On 26th August 2024, the “Employee Choice Pathway” was introduced, allowing eligible employees to request a change in their employment contract.  

Starting 26 February 2025, all eligible casual employees can request a transition to permanent employment under the Employee Choice Pathways. Employers must respond to these conversion requests within 21 days and provide detailed reasons if they refuse.   

Eligibility for Conversion: 

A casual employee can give written notice to their employer to convert to permanent (full-time or part-time) employment under the Employee Choice Pathway if they: 

• Were employed for at least 6 months (12 months if employed by a small business).  
• Believe they no longer meet the requirements of the casual employee definition.  

Casual employees employed before 26th August 2024 can issue a notice:  

• From 26 February 2025, if not employed by a small business.  
• From 26 August 2025, if employed by a small business.  

 However, a casual employee cannot provide notice if:  

• They are currently involved in an ongoing dispute with their employer about changing to permanent employment under the Employee Choice Pathway.  
• In the last 6 months, their employer refused a previous notice, or they resolved a dispute with their employer about employee choice through a relevant dispute resolution process.  

What are The Impacts on The Employers?

Employers need to be aware of these changes and ensure compliance to avoid penalties. The new laws require employers to assess the true nature of the employment relationship and provide casual employees with the necessary information and opportunities to transition to permanent roles if they qualify. 

Key Impacts:  

• Compliance Requirements: Employers must accurately classify employees based on the new definition of casual employment and provide the Casual Employment Information Statement (CEIS) to all casual employees. 
• Conversion Requests: Employers must respond to conversion requests under the Employee Choice Pathway within 21 days and provide detailed reasons if they refuse. 
• Penalties for Misclassification: Misclassifying workers as casual to avoid providing entitlements such as leave and superannuation can result in significant penalties, including civil penalties for engaging in ‘sham’ casual engagements.  
• Unfair Dismissal Claims: Casual employees may have access to unfair dismissal protections, depending on the nature of their employment relationship. 

Conclusion

Staying informed is key for both employers and employees. These changes represent a significant shift in Australia’s employment landscape, aiming to provide greater job security for casual employees while ensuring that employers have clear guidelines to follow. By understanding and implementing these changes, both employees and employers can benefit from a more stable and transparent working environment.