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As if you didn’t have enough paperwork to worry about, Fair Work have just thrown another one into the mix.
In addition to the “Fair Work Information Statement”, which you already have to give to every single employee, there is now another statement specifically made for casual employees. They have creatively called it the “Casual Employment Information Statement”.
The statement outlines:
The definition of a casual employee.
The rules around casual conversion to permanency.
Special rules for small businesses.
Info about how the Fair Work Commission deals with disputes.
But why?
It was made in response to years of confusion around the definition of a casual worker, which resulted in a landmark legal ruling that allowed casuals who were found to be “not casual” to claim compensation for all permanent entitlements (leave, redundancy, notice periods), even though they were receiving a 25% loading for being a casual. To prevent a tidal wave of claims from disgruntled ex-employees, the government finally made a decision to give us some clarity about what a casual employee actually is, and what they are entitled to if they convert to permanency.
A casual employee is now defined as an employee who:
is offered a job and the offer does not include a “firm advance commitment” that the work will continue indefinitely with an “agreed pattern of work”; and
they accept the offer knowing that there is no firm advance commitment.
Casual Conversion
As for the casual conversion rules, well they have been around for a couple of years already for any industry covered by an award (in case you didn’t know – and a lot of people don’t). The change is that it is now part of the National Employment Standards, so it now applies to all casual employees.
The basic rules are that if an employee meets these criteria:
have been an employee for 12 months; and
could be reasonably converted to a permanent employee (e.g. they work reasonably similar days or similar hours per week); and
have a reasonable expectation of ongoing employment;
then you must offer them the opportunity to become a permanent employee – part time or fulltime.
If they meet those criteria, then they aren’t really meeting the definition of a casual anymore, so this rule makes sense.
The requirement to offer casual conversion doesn’t apply if you are a small business (less than 15 employees). However, employees can still request it if they meet the criteria; and you must assess them based on the criteria above and consult with them about the decision (like you have to with all significant decisions about someone’s employment.)
Exceptions
If you can prove that there are “reasonable business grounds” that you can’t take your casual on permanently, then it is possible to decline this request, or explain that they are unable to offer it to you. “What are reasonable business grounds?” you ask… you need to be able to consult with the employee and provide them with a legitimate reason, such as:
Outlining why the conversion would require a significant adjustment to the employee’s hours.
Proving that the job won’t exist in 12 months.
Having a reasonable explanation for why the hours are likely to reduce substantially from the current pattern, or the regular days and times they work will change significantly in the next 12 months (you can’t just change someone’s hours, days, or times to avoid your obligation to offer permanency).
Can they say no?
Not everyone wants to be permanent; some people like the flexibility of hours, or the extra 25% on their hourly rate, but you still need to give them the choice.
As with all things in HR, you absolutely must get this in writing.
One benefit is that if you have offered them permanency and they decline, it will be much harder for them to claim in future that they should be considered as permanent. This is because they have agreed they are casual and would like to remain so. However, just because an employee declines once, that doesn’t mean they can’t change their mind; but they do need to wait 6 months after declining permanency before requesting you to assess their eligibility again.
What do we do now?
If this is all news to you, it is important that you re-evaluate some of your HR processes and documents now; particularly employment contracts and offers, and your systems for rostering casuals.
In the meantime:
Start giving all new casuals (anyone who started on or after 27 March 2021) this new statement (along with this other statement) right away.
Existing employees who started before 27 March 2021 can be given the new statement at any time between now and 27 September 2021.
Start calendarizing employment anniversaries for casual staff.
Do an audit of the anniversary dates of your existing casuals and see who has been there over a year.
Look at your rosters and timesheets to see if they meet the criteria for the last 6 months.
If an employee meets the criteria, you have 21 days after their employment anniversary to make the offer of permanency, or explain the reasonable business ground for not offering.
If you need help with any of this, you can contact us at hi@hitobito.com.au
– helping you navigate these kinds of changes is exactly why Hitobito exists.