Significant changes to casual employment that affects your business

The retail and hospitality industries have high concentrations of casual employees. This flexible workforce allows for adjustments in response to changes in operational needs.


New definition of 'casual employee'

Clarity is very important when making your initial offer of casual employment. It needs to be very clear that:

  • the offer of casual employment isn’t a commitment for continuing or indefinite work

  • the employee accepts that offer on that basis

If an employee accepts an offer of casual employment, they’ll remain a casual employee. This only changes later on if you offer permanent employment (and they accept it) or if they stop working for you.


Offers and requests for 'casual conversion'

There’s now an obligation to offer casual employees to convert to permanent employment. That can be a conversion to either part-time or full-time employment. You need to offer casual conversion where a casual employee has:

  1. been employed for 12 months and

  2. worked regular hours for six months and those hours could continue. This is regardless of whether those hours are part-time or full-time

You’re not required to make this offer if there are ‘reasonable business grounds’. This includes where:

  • the casual employee’s position won’t exist in the 12 months after your decision to not make the offer or

  • the hours of work for that casual employee will significantly reduce over the next 12 months or

  • there’ll be a significant change to the days and/or the hours worked by that casual employee

Small businesses aren’t required to offer their casual employees casual conversion. You’re a small business if you have less than 15 employees.


Casual employees can request casual conversion if they meet the above criteria. This includes casual employees of small businesses. When this happens, you’ll need to consult with the casual employee who’s made that request. After consultation, you may refuse a conversion request on reasonable business grounds.


Casual Loading Offset

What happens if an employee is misclassified as a casual employee? Employers can offset any entitlements owed to that employee against casual loading payments. This means no double-dipping by employees. They’re no longer able to claim that they’re entitled to paid leave and also receive a 25% casual loading.


Updated Casual Employment Information Statement

You must provide all new casual employees with the Casual Employment Information Statement. This is published by the Fair Work Ombudsman.


You’ll need to provide it to existing employees as well, as soon as possible after 27 September 2021. Small business employers are exempt from doing this.


Our tips on moving forward

We recommend your business takes these practical steps:

  • Put in place processes to ensure compliance with the new casual conversion obligations. Review how these processes interact with award and agreement-covered employees

  • Establish a process to ensure casual employees receive the Casual Employment Information Statement

  • Introduce new clauses to casual employment contracts that reflect these recent amendments

Need help putting these FW Act amendments into place?

Get in touch with us by sending an email to info@dreamstonehr.com.au or ring (02) 8320 9320. We’re able to help employers nationwide.

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