Definition of a casual employee

A new bill amending the Fair Work Act gives employers much needed clarity on the definition of a casual employee.

In late 2020, the Federal Government released the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill (the Bill).

The Bill amends the National Employment Standards (NES) in the Fair Work Act 2009 (FW Act) to make important changes to laws and arrangements relating to casual employees and provide employers much needed clarity around casual employment. Until these amendments, the FW Act did not define what is a ‘casual employee’…the definition was supplied by the courts.

The FW Act now defines a person to be a casual employee if they accept an offer for a job from an employer knowing that there is no firm advance commitment to ongoing work with an agreed pattern of work. To determine whether these conditions have been met, only the following factors are taken into account under the FW Act:

• whether the employer can elect to offer work;
• the ability of the employee to accept or decline work;
• whether the employee will work only as required according to their employer’s needs;
• whether the employment is described as casual employment; and
• whether the employee is entitled to receive casual loadings or a specific rate of pay.

Provided that there is no firm advance commitment to continuing and indefinite work at the time that the employment offer is made, the employee will remain a casual employee until they are converted to full-time or part-time work – or they accept an alternative offer of employment by the employer. Further, a regular pattern of hours does not indicate commitment to continuing and indefinite work according to an agreed pattern of work.

What do the new laws mean for employees?

With a definition of a casual employee now being locked into employment law, employers are strongly advised to ensure that any contract of employment or employment agreement offered to a casual worker clearly states:

• the offer is for employment as a ‘casual employee’;
• the offer of employment is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person;
• the amount of the casual loading, or specifies a casual rate of pay;
• the employer can elect to offer work and that the employee can elect to accept or reject work; and
• the employee will work as required according to the needs of the employer.

While these changes provide employers much needed clarity on the definition of a casual employee, the Bill also contains a number of other important changes to casual status employment, including giving eligible casual employees the right to convert to permanent employment in certain circumstances.

Do you employ casuals? Need to know what you need to know for compliance with the new Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill? You could take the time to figure things out for yourself but wouldn’t you prefer an easier option? Give Bare Bones Consulting a call. Simple.