A new definition of “casual employee”
A new section 15A defines a person as a “casual employee” where:
- there is an offer of employment made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work; and
- the person accepts the offer on that basis; and
- the person is an employee as a result of that acceptance.
In determining whether there is no such firm advance commitment, only the following can be considered:
- whether the employer can elect to offer work and whether the person can elect to accept or reject work;
- whether the person will work as required according to the needs of the employer;
- whether the employment is described as casual employment; and
- whether the person will be entitled to a casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument.
Subsections 15A(3) and 15A(4) explain that:
- a regular pattern of hours does not of itself indicate a firm advance commitment to continuing and indefinite work according to an agreed pattern of work; and
- the question of whether a person is a casual employee of an employer is to be 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.
The definition of “casual employee” is crucial because it determines an employee’s statutory rights, particularly under the National Employment Standards (NES). Until now, a “casual employee” has been defined in case law to generally mean an employee that has “no firm advance commitment from the employer to continuing and indefinite work according to an agreed pattern of work”, according to WorkPac Pty Ltd v Skene  FCAFC 131 (Skene), . This has been determined by reference to the actual conduct of the parties, rather than the employment contract.
The new definition moves away from the common law approach by prioritising the form of the employment relationship over its substance. Moreover, a regular pattern of hours, which at common law is central to discerning whether casual employment exists, is no longer a telling factor. This directly contradicts the recent findings in the cases of Skene and WorkPac Pty Ltd v Rossato  FCAFC 84 (Rossato).
Under the new FW Act, casual employees will remain as such until they are converted to full-time (see below) or the employer offers, and they accept, employment of a different classification. This means that courts will not be able to determine the nature of the employment relationship as it varies from time to time. If an employee works as a casual for a few weeks, then starts working a 38 hour week for the same employer without having signed a contract, they may still be considered to be a casual if the original contract says so.
These amendments place a lot more weight on the way employment contracts are drafted, and significantly limit the scope for employees to seek review of questionable casual employment arrangements.
Employers should review the drafting of their letters of offer and employment contracts to ensure that their contracts pick up the wording from the legislation.