Significant changes to casual employment came into effect on 26 August 2024 as part of the “Closing the Loopholes” amendments to the federal Fair Work Act. These amendments introduce a new definition of casual employment and a new pathway for casual employees to become permanent.

Aged care providers must ensure that they are familiar with the amendments, as they may have a significant effect on the way casual employees in their organisation operate. We will explore the key changes, what they mean, and what providers will need to do to ensure they remain compliant with the Fair Work Act following these amendments.

What is a “casual employee”?

Casual employment is characterised by the absence of a “firm advance commitment to continuing and indefinite work”. One way to understand this concept is to ask this question: “Has my employer committed to giving me ongoing work with no definite end date?” If the answer is “no” then you are likely characterised as a casual employee. Answering this question can be surprisingly complex though, and what information is relevant when doing so has changed in a major way.

Previously, whether a “firm advance commitment to continuing and indefinite work” existed was determined solely on the basis of the offer or contract of employment. If the contract or offer was consistent with the terms of a casual employment, the employee would generally be deemed a casual employee – the conduct of the employee and employer after the agreement was made was not considered.

Following these recent amendments, answering the question of whether an employee is casual or not will require employers to instead look at the real substance, practical reality and true nature of an employee’s employment relationship. When trying to determine if a firm advance commitment to continuing and indefinite work exists, providers should ask themselves:

• Can the organisation offer (or not offer) work to the employee intermittently (and does this actually occur)?
• Can the employee accept or reject that work (and does this actually occur)?
• Is the employee reasonably likely to continue to have the same kind of work available to them in the future?
• Does the employee have a regular pattern of work? (A regular pattern of work may not be entirely uniform, any may vary over time for things such as illness, injury, or recreation.)
• Are there full-time or part-time employees performing the same kind of work that the employee is performing?

This list is not exhaustive, and the legislation allows for any other relevant factors to also be considered. Casual employees who were employed before 26 August 2024 will stay casual under the new definition unless they move to permanent employment (either through the casual conversion pathways explained below, acceptance of an alternative role or other means).

What is the new casual conversion pathway?

New casual conversion rules apply to casual employees who commence employment from 26 August 2024 and is now a “request only” pathway. Under the new process, eligible employees may notify their employer of their choice to become a permanent employee if:

• they have worked with the employer for at least six months; and
• they believe they no longer meet the definition of casual employee.

This means that for casual employees hired from 26 August 2024, providers will no longer be required to offer conversion, and it will instead be up to each casual employee to make the request.

Transitional arrangements are in place for casual employees hired prior to 26 August 2024. Providers will need to ensure they continue to comply with the previous “offers and requests” casual conversion process for those employees until 26 February 2025, at which point the new request only pathway will be available to all casual employees, if eligible.

Under the new process, once a notification has been received from an employee, providers must decide whether to accept (and thereby make the employee permanent) or refuse the notification. Refusal may only be given on the following grounds:

• the employee still meets the definition of casual employee
• there are “fair and reasonable operational grounds” to refuse; or
• accepting would mean the employer would not be complying with recruitment or selection processes required by law.

“Fair and reasonable operational grounds” include circumstances where accepting the notice would:

• require substantial changes to the way the aged care facility is organised
• result in significant impacts on the operation of the aged care facility; or
• substantial changes to the employee’s terms and conditions of employment would be required to ensure the provider does not break any rules in a relevant award or agreement the employee would be subject to as a permanent employee.

Importantly, casual employees will remain casual unless:

• they decide to convert to permanent under the new casual conversion pathway
• they are made permanent under an award or enterprise agreement
• they accept an alternative offer of employment (other than as a casual employee); or
• their employment status is changed because of an order of the Fair Work Commission.

Where an employee is covered by an enterprise agreement, if the enterprise agreement contains a casual conversion clause that is more favourable than the legislation, then the enterprise agreement will apply.

Casual employment information statement

A small, but important amendment for providers to note is that the Casual Employment Information Statement (CEIS) must now be given to a casual employee:

• before, or as soon as possible after, they begin employment
• as soon as possible after that employee has been employed for six months; and
• every 12 months after the employee began their employment.

The CEIS may be provided in person, by email or through another method. Providers are encouraged to check the Fair Work Ombudsman website when providing the CEIS to employees to ensure the latest version is provided.

What providers need to do

To ensure compliance with the changes to casual employment, aged care providers should:

• review employment contracts of casual staff to ensure they are fit for purpose, paying attention to work patterns and implied commitments to ongoing work
• review policies and procedures to ensure they are consistent with the new legislation
• review any enterprise agreements that your casual employees may be covered by. If an enterprise agreement contains a more favourable casual conversion clause, then the terms of the enterprise agreement will apply
• communicate with employees regarding the changes. New casual employees must be provided with the CEIS; however, providers may wish to also inform existing casual employees about their rights under the transitional arrangements
• monitor the patterns of your workforce to identify where casual employees may need to be reclassified as permanent.

These changes to casual conversion are part of a broader change to the federal Fair Work Act (also see our article on the right to disconnect, which also came into effect on 26 August 2024). For aged care providers, ensuring that the changes are understood by all staff will help ensure compliance with the new laws, and minimise disruption to the operation of your organisation.