Starting from 26 August 2024, the Closing Loopholes Bill introduced substantial changes to casual employment. These updates represent some of the most significant changes in recent years, with severe penalties imposed for those failure to comply.
What is the Casual Employment Information Statement?
The Casual Employment Information Statement (CEIS) is a key document introduced by the Fair Work Ombudsman. It provides casual employees with vital information about their rights and obligations under the Fair Work Act 2009. The CEIS plays a crucial role in ensuring transparency and fairness between employers and casual employees, helping to prevent misunderstandings and ensuring compliance with employment laws. Let’s dive into more details of these changes below.
The New Definition of Casual Employment
Current Definition: Under the existing framework, a casual employee is defined by:
- The employer offers employment without a firm commitment to ongoing, indefinite work.
- The employee accepts this offer based on its casual nature.
- The employee starts work under these casual conditions.
New Definition: Effective 26 August 2024, the criteria for determining casual employment will shift from contract terms to a more objective assessment of the employment relationship. The new definition will focus on:
- Absence of Firm Commitment: There must be no firm advance commitment to continuing, indefinite work.
- Casual Loading or Pay Rate: The employee must receive a casual loading or a specific casual pay rate as stipulated under an award or enterprise agreement.
This change means that the actual nature of the employment relationship will be reviewed more closely, rather than relying solely on contract terms. Key factors to consider include:
- Work Offer and Rejection: Whether the employer or employee has the flexibility to offer or reject work.
- Future Work Availability: The likelihood of ongoing work in the business based on its nature.
- Comparison with Other Employees: Whether similar roles are filled by full-time or part-time employees.
- Work Pattern Regularity: The regularity and patterns of the employee’s work, even if there are some fluctuations.
Importantly, fixed-term contracts will no longer be considered casual employment contracts, even if they can be terminated before the end date.
Casual Conversion
Under the new regulation, casual employees who have been employed for at least 6 months (or 12 months for small businesses) have the right to request conversion to permanent status if:
- They believe their role no longer fits the casual definition.
- They are not currently in a dispute with the employer regarding their status.
- They have not had a previous conversion request denied in the last 6 months.
Employer’s Obligations:
- Response Time: Employers must respond in writing within 21 days of receiving the conversion request.
- Grounds for Rejection: Employers can reject a conversion request if:
- The role is still genuinely casual.
- There are fair and reasonable operational grounds for refusal, such as significant changes in business operations.
- Accepting the request would violate recruitment or selection laws.
If an employer agrees to the conversion, they must consult with the employee on details such as whether the employment will be full-time or part-time, the hours of work, and the start date.
Workplace Rights: Employees’ rights to request conversion are protected under the General Protections of the Fair Work Act, ensuring that they are not unfairly treated for seeking permanent employment status.
Dispute Resolution
If an employer rejects a conversion request or fails to offer conversion, they must:
- Provide detailed reasons for their decision.
- Outline how the issue can be resolved, including the right to apply to the Fair Work Commission (FWC).
Disputes can be resolved through the FWC, which may facilitate conciliation, mediation, or arbitration if the issue is not resolved at the workplace level.
Penalties for Non-Compliance
Severe penalties are imposed for:
- Violating Fair Work Commission orders.
- Misrepresenting employment as casual.
- Dismissing employees to avoid conversion.
- Misleading practices related to casual employment.
Employers must not alter work patterns or terminate employees to avoid conversion to permanent status. The new legislation also includes civil remedy provisions for employers who engage in practices aimed at evading conversion, such as making false statements to persuade individuals into casual contracts. Furthermore,if a statement is not issued correctly, businesses may face a penalty of up to a maximum of $93,900 (although it is rare).
To Wrap Up
Employers must ensure that both employment contracts and practices clearly reflect the casual nature of the role and be prepared to respond to conversion requests to permanent status after 6 months (or 12 months for small businesses), providing detailed reasons for any denial within 21 days while avoiding discrimination.
The recent changes to casual employment regulations is crucial and will require employers to carefully review and adjust their practices. By understanding and complying with the new definitions, conversion rights, and dispute resolution processes, employers can navigate these changes effectively and avoid substantial penalties.
How does Workstem help?
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