Casual Vs Permanent - Staff
The Fairwork Act 2009 has been amended further to change casual employees' workplace rights and obligations. This may affect your business!
Employers are obligated to give all new casual employees a Casual Employment information Sheet before, or as soon as possible after they start their job.
Employers are also expected to give their existing casual employees a copy of this Casual Employment Sheet as soon as possible if they haven't already done so, as Fairwork was seeking that it is given to them as soon after the 27th March 2021 as possible.
What is the definition of Casual Employment?
The Fair Work Act has been amended to include a statutory definition of a "casual employee"
A casual employee is a person who is
Offered employment without a "firm advanced commitment and indefinite work" and
Accepts that offer
So if a person accepts the job offer knowing fair well that there is no firm advanced commitment to ongoing work with an agreed pattern of work they may be a casual employee.
What do you need to do about this?
Rather than having to offer the casual employee a permanent position, small businesses (with fewer than 15 staff members) now only need to give their employees a copy of the CEIS (casual employment information sheet). The onus now lies on the employee to request permanent status if all the conditions are met.
Whilst Small businesses are under no obligation to offer casual conversion to permanent, they are obligated to consider the employees request.
Note: that NON small businesses are treated differently, and they are obligated to review and offer conversions to casual employees. To discuss this further, please give us a call.
When can a casual employee be eligible to convert to a permanent employee?
An employee will only be elgible if they have worked for the employer for 12 months and have had a regular pattern of work in the 6 months prior to their request.
They do not need to have worked a full week, but simply have had a regular pattern.
Tip : It is still possible to have casuals with a regular pattern, but with no firm advanced commitment to continuing definitive work as outlined in the new definition of casual employment
Can a small business refuse to convert a casual employee to a permanent employee?
The small business is obligated to consider the employees request and if they refuse, it must be based on reasonable grounds.
The Bill defines reasonable business grounds as :
- Where the conversion would require a significant adjustment to the employee's hours of work in order for the employee to be employed permanently.
- Where the employee's position will cease to exist in the 12 months after the conversion right arises
- Where the hours of work which the employee is required to perform will be significantly reduced in the 12 months after the conversion right arises
- If there will be a significant change in either the days or times on which the employee's hours of work are required to be performed in the 12 months after the conversion right arises.
If there are reasonable grounds to not accept an employee's request to convert, the employer must provide WRITTTEN notice to the employee within 21 days of the assessment.
Generally if an employee is converted from casual status to permanent status, the minimum wage they will be entitled to will be lower than the minimum wage that they have been receiving as most casual employees are entitled to a 25% "casual loading" on the minimum base rate of pay.
A converting casual employee will, in most cases, then be lowering their weekly take home wage as they will be forfeiting the 25% loading. However, as a permanent employee they will now be entitled to :
- Paid annual leave
- Paid personal / carer's leave
- Paid compassionate leave
- Payment for absence on a public holiday
- Payment in lieu of notice of termination
- Redundancy pay
This is an important change in the Fairwork Act and affects many small businesses. You are not alone, but you do need to comply!
Please get in touch with us today to discuss your situation so that we can ensure that you are compliant with your employer obligations.
This articles intention is to inform rather than advise and is based on legislation at the time. Each Taxpayer’s circumstances vary so we strongly recommend that you discuss this information with your Tax Agent, Accountant or Bas Agent before implementation. If you take, or do not take action as a result of reading this article, we accept no responsibility for any financial loss incurred.