New casual employment rules kick in next week: Here’s what you need to know
Here’s what employers need to know about the changing rules for casual employees — and how to avoid a $66,000 penalty.
New laws are set to kick in next week for employers of casual workers, meaning any casual who has been with the business for 12 months or more must be issued a written offer to convert to permanent employment.
First introduced in 2020 and passed in March this year, the new rules give casual employees the right to convert to permanent employment, either on a part-time or full-time basis.
The new rules come into effect from Monday, 27 September, 2021. For some employers, there may be actions needed before then.
Here’s everything you need to know.
Casual conversion rules: What do businesses need to do?
With the exception of small business employers, as defined by the Fair Work Ombudsman, businesses must make a written offer to convert a casual employee to a permanent staff member within 21 days of their 12-month anniversary with the business.
If the employee has effectively been working full-time hours for at least six months, the employer must offer them a full-time, permanent position.
If they have been working less than full-time hours, the employer must offer them part-time employment.
Employees must respond to the offer within 21 days. If they don’t respond, employers can assume they have declined the offer.
However, from 28 September, eligible casual employees can make a request to convert to permanent employment once every six months, or earlier if they become eligible.
What penalties are in place?
Employers cannot change or reduce an employee’s hours, or terminate employment, in order to avoid having to make a conversion offer.
Businesses that fail to make an offer could reportedly face penalties of $66,000 or more, while individuals could be fined $13,000.
What are the rules for converting existing casual employees?
For businesses with casual employees who started before 27 March, 2021, employers must assess whether their casual staff members are eligible for conversion to permanent employment. More detail on eligibility below.
Within 21 days of making the assessment, they must make a written offer of conversion to all eligible casual employees.
For ineligible employees, or if they are not planning on making an offer to convert, they must write to employees explaining the reasons why.
Crucially, these letters must be sent before 27 September, 2021.
Do casual employment changes apply to small businesses?
Businesses with fewer than 15 employees do not have to offer casual conversion.
However, from 28 September, eligible casual workers within these businesses can request to convert to permanent employment at any time on or after their 12-month anniversary with the business.
In this case, the employer can only refuse the request if they have consulted with the employee and have reasonable grounds to do so. Reasonable grounds could be that the position is likely not to exist within 12 months’ time; that the employees’ hours would significantly reduce; or that the days and times of work would change significantly.
More information about reasonable grounds to deny a request is available here.
Employers are required to respond to an employees’ casual conversion request in writing within
21 days, to accept or deny the request. If they decline, they must explain why in the response.
Casual employees can make a request to convert to permanent employment once every six months, or earlier if circumstances change, meaning they become eligible.
Which employees are eligible for casual conversion?
In order to be eligible, casual employees must have been working with the business for 12 months, and have been working a regular pattern of hours on an ongoing basis for at least six months.
The rules apply if the employee can reasonably continue working those hours as a full- or part-time employee, without making any significant changes.
More information is available here.
