The changes in the ‘Closing Loopholes No. 2 Act’ have been passed into law and most of the changes will commence in 2024.
What does this mean for employers and employees, and what do they need to do? In this article we explain the key changes to casual employment, when they commence, and what employers and employees should do.
What are the Changes?
New Definition of Casual Employment
The changes introduce a new definition of casual employment that looks to whether there is an ‘absence of a firm advance commitment to continuing and indefinite work’, considered according to the ‘real substance, practical reality, and true nature of the employment relationship’, not only the terms on which the employee has been engaged.
Some implications are:
- If at the start it is expected that continuing and regular work will be offered then the employment is casual even if labelled as permanent in the contract.
- If, however, the employment genuinely starts as casual, although it may become ongoing and regular work will not mean that the employee ceases to be a casual.
New ‘Employee Choice’ Process
Employers will be required to issue a revised version of the Casual Employment Information Statement much more often.
Currently the statement only needs to be given once. After the new laws take effect employers will need to give it when a casual commences work, and again after they complete each 12 months of work. Employers that are not small businesses will also need to supply it after 6 months.
A casual will be able after six months’ employment, or 12 months with a small business, to assert that their employment has ceased to be casual.
An employer that accepts this must engage the employee on a permanent basis.
An employer that does not accept this can raise objections on certain grounds including that it would bring ‘significant impacts on the operation of the employer’s enterprise’.
Overall, the process will be simpler. Employees will have choice about whether to activate a notification. Employers will no longer have to conduct a review of long-term casual engagements and assess whether to offer a permanent position.
Before the new laws take effect, we will provide an update about the timing for how and when the ‘employee choice’ changes will apply to new casuals and also to existing casuals, and about the grounds on which an employer can object.
When do the New Laws Take Effect?
The new laws affecting casual employment will come into effect on 26 August 2024.
What Should Employers and Employees Do?
Employees should:
- Understand the new meaning of casual employment.
- Take care to understand an employment offer that is made to them.
- Understand the ‘employee choice’ process.
Employers should:
- Consider how their current engagement of casual employees may be affected under the new definition of ‘casual employee’.
- Consider how to adjust their processes to the changing requirements for issuing the Casual Employment Information Statement.
- Review their employment templates..
Some more information is available here or you can book online for an initial no-obligation chat about reviewing an employment contract or contractor agreement.