Defining Casual Employment

In March 2021, the Federal Parliament passed legislation making changes to the Fair Work Act 2009, in response to intense scrutiny arising from two Federal Court decisions.

The Act's new s15A defines a "casual employee" as one who accepts a job offer from an employer knowing there is no firm advance commitment to continuing work with an agreed pattern, and introduces new NES casual conversion arrangements in Part 2-2 Division 4A.

The amendment says casual status is "assessed on the basis of the offer of employment and the acceptance of that offer, not on the basis of any subsequent conduct of either party".

This emphasises here for members is the importance of a clear contract setting out the casual nature of the employment at the commencement of employment.

Since this legislation, one of the two Federal Court decisions was decided on appeal in the High Court, where the court ruled that contracts are decisive in determining employment types. This accords closely with the new definition of casual employment in the Act, and emphasises even further the importance of clearly establishing, preferably by use of a casual employment contract, the casual nature of the employment at or prior to the commencement of employment.

While the clarification about the nature and definition of casual employment was a key component to address the uncertainty following the Federal Court decisions, it is the extension of casual conversion provisions to all employees that are likely to have a far bigger impact on employers. The Act provides that an employee may seek (and must be offered, for a large employer) conversion from a casual to a permanent role after 12 months of casual employment, with at least the last six months being regular and systematic hours.

Many Awards already had some provision for such casual conversion clauses, although the process and timing varied greatly. In order to ensure consistency between Awards and the Act, the Fair Work Commission was directed to make such changes as are necessary to all Awards.

The joint Motor Trade Organisations (MTO) have made submission on changes to the Vehicle Repair, Services and Retail Award 2020, and monitored the approach to other relevant Awards.

The MTO’s support what, at the time of writing, were the Commission’s provisional views, but which are likely to be implemented, which are that:

• The definition of casual employment in the Vehicle Award is not consistent with the legislated definition, and should be replaced with reference to the legislated definition.

• The casual conversion provisions of the Vehicle Award should be removed and replaced with a reference to the NES provisions.

A similar approach has been taken with the vast majority of other Awards. The review of the Awards must be finalised by the statutory deadline of September 27.

Information about casual employee’s rights are contained in a new Fair Work Information Sheet which must be provided to all casual employees.