Under the Fair Work Act 2009 (Cth) (FW Act), the general rule is that an employee is a casual employee of an employer if:

• the employee would be entitled to a casual loading or specific casual rate; and
• the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work.

Is there a firm advance commitment to continuing and indefinite work?

In assessing whether a firm advance commitment to continuing and indefinite work exists, the FW Act requires consideration of the real substance, practical reality and true nature of the employment relationship.

The following is relevant:

• whether there is an inability of the employer to elect to offer or not offer work, or an inability for an employee to elect to accept or reject work;
• employee will continue being available in the enterprise in the future;
• whether full-time or part-time employees are performing the same type of work that is usually performed by the employee; and
• whether there is a regular pattern of work for the employee. A pattern can be regular even if it is not uniform and includes some fluctuation or variation over time.

When can casual employees convert to permanency?

An employee who legitimately commences employment as a casual employee within the meaning of the FW Act remains a casual employee until:

• their status changes under the casual conversion provisions in the FW Act or an applicable award or enterprise agreement; or
• they accept an alternative offer of employment other than as a casual employee.

If an eligible casual employee believes their status has changed, they can provide written notice to their employer that they believe they no longer meet the requirements for casual employment. An employee will generally be eligible if they have completed the relevant minimum period of employment (6 months or 12 months for a small business employer) and have not disputed their employment status in the previous 6 months.

An employer must provide a written response to the employee’s notification within 21 days. The employer must consult with the employee prior to providing the response.

An employer accepting the notification must provide details about the proposed new full-time or part-time employment arrangements and discuss the proposed arrangements with the employee.

An employer not accepting the notification must set out their reasons in the written response. An employer may not accept the notification if:

• the employee still meets the requirements of casual employment; or
• there are fair and reasonable operational grounds for not accepting the notification.

Fair and reasonable operational grounds include the following:

• substantial changes would be required to the way work in the enterprise is organised;
• there would be significant operational impacts on the employer’s enterprise;
• substantial changes to the terms and conditions of the employee’s employment would be reasonably necessary to ensure the employer does not contravene an applicable award or enterprise agreement; or
• accepting the notification would be contrary to public sector laws concerning recruitment or selection processes.

Tune in next week as we continue our analysis of casual employment and conversion under the FW Act with a case study of a recent ruling that explores the issues: Breaking down Fair Work Act casual employment and casual conversion rights – Part 2

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