Changes to casual employment and the Right to Disconnect

These changes are part of the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 (the CL Act No.2), which received Royal Assent on 26 February 2024.

New provisions in the CL Act No. 2 change the meaning of ‘casual employee’ in the Fair Work Act 2009 (Cth) (FW Act) and replace the current casual conversion provisions in the National Employment Standards (NES) with a new ‘employee choice pathway’ to permanent employment. There are also new obligations on employers to provide the Casual Employment Information Statement.

Changes to the meaning of ‘casual employee’

The CL Act No.2 introduces a new definition of a ‘casual employee’, where a person is only a casual employee if:

there is an absence of a commitment to ongoing and indefinite work; and
the employee is entitled to a casual loading or a specific rate of pay for casuals.

There are additional factors for interpreting this definition which look at, among other things, “the real substance, practical reality and true nature of the employment relationship.”

The CL Act No.2 clarifies that there is no single factor that will determine casual employment status and that it is possible to be a casual worker with a regular pattern of work and still not be deemed to have a firm advance commitment to work.

Changes to casual conversion in the NES

The current casual conversion pathway in the NES will be replaced with a single ‘employee choice’ pathway. Note that the current casual conversion pathway will still apply to existing casual employees for a transitional period of 6 months from 26 August 2024, or for 12 months for employees employed by a small business.

Under the new employee choice pathway, a casual employee can notify their employer if they believe they should change to permanent employment because they are no longer a ‘casual employee’. This effectively means that an employer does not need to “offer” conversion, the employer will now wait for the employee to notify them via the “employee choice notification”.

An employer may refuse an ‘employee choice notification’ on any of the following grounds:

The employee still meets the definition of a casual under the FW Act, after considering the definition in the FW Act and the employee’s current employment relationship with the employer.
There are ‘fair and reasonable operational grounds’ for not accepting the notification.

“Fair and reasonable operational grounds” for not accepting an employee choice notification include the following:

That substantial changes would be required to the way in which work in the employer’s enterprise is organised
That there would be significant impacts on the operation of the employer’s enterprise
That substantial changes to the employee’s terms and conditions would be reasonably necessary to ensure the employer does not contravene a term of a fair work instrument that would apply to the employee as a full-time employee or part-time employee.

An employee choice notification will also become a workplace right, provided under the general protections of the FW Act.

Changes to when the Casual Employment Information Statement must be provided

The Casual Employment Information Statement must be provided to a casual employee before or as soon as reasonably practicable after employment commences. To ensure that casual employees are reminded of their rights and ability to change to permanent work, employers will be required to provide the Statement to casual employees:

For small business employers – once only after 12 months of employment, or
For other employers – after the first six months of employment, and after the next 6 months of employment, and then after every 12 months of employment.

How do these changes affect casual employees that are currently employed?

Employees that are currently employed as casuals immediately before commencement will remain a casual employee unless the employee changes to part-time or full-time employment through one of the pathways provided for in the FW Act.

This means that any casual employee who was already employed by their employer on 26 August 2024 will still be a casual employee under the new definition. These casual employees will still be able to seek casual conversion under the transitional provisions for 6 months (or 12 months for small businesses) after this date.

Employers of currently employed casuals must give the Casual Employment Information Statement to them within 3 months of the provision commencing.

Right to disconnect

There has been a lot of media coverage about the right to disconnect, introduced by the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 (the CL Act No.2). This change is aimed to support a healthier work-life balance for employees.

Currently, there are no terms in modern awards that give employees the right to disconnect. The Fair Work Commission (FWC) is considering whether these rights should be included in modern awards.

The right to disconnect provisions introduced by the CL Act No.2 will:

Allow an employee to refuse to monitor, read or respond to contact or attempted contact from their employer or a third party (e.g. a client) outside of the employee’s working hours unless the refusal is unreasonable
Empower the FWC to resolve disputes by making stop orders, similar to the stop bullying and stop sexual harassment orders
Require that modern awards be varied to include a ‘right to disconnect’ term
Require the FWC to make written guidelines in relation to how this operates
Clarify that the right to disconnect is a workplace right, provided under the general protections of the FW Act.

The FWC will have the power to determine what is “unreasonable” contact, taking into account a list of factors which include, but are not limited to:

the reason for the contact
the frequency and method of contact
remuneration
role and responsibilities; and
the worker’s personal circumstances, which may include family responsibilities.

What are some steps that businesses can take?

Before the new right to disconnect commences, there are some proactive steps that employers can take now:

Consider what the potential impact of a right to disconnect would have on operations. For example, if workers had the right not to respond to emails from 6pm-8am, would that have any impact on operations?
Encourage managers to respect employees’ time away from work.
Provide training to managers to prevent any adverse action against employees who exercise the right to disconnect.

When do these provisions commence?

The new casual employment definition and the new employee choice notification provisions commence on 26 August 2024.

The right to disconnect provisions commence on 26 August 2024 or on 26 August 2025 for small business employers.

More information

The Fair Work Ombudsman have information available at: https://www.fairwork.gov.au/about-us/workplace-laws/legislation-changes/closing-loopholes/additional-fair-work-act-changes