Starting 26 August 2024, some important updates to the Fair Work Act will take effect, with some changes coming into effect by proclamation (meaning they will begin at a later date, determined by the government). These changes are especially relevant if you run an online business that hires casual workers or contractors. From gig workers to part-time freelancers, the updates aim to offer greater clarity and protection for all parties involved.
Let’s break down these changes and what they mean for your business.
The New Definition of Casual Employment
As of 26 August 2024, the definition of what makes someone a "casual employee" has been fine-tuned to ensure everyone’s on the same page. Here’s what you need to know:
- The employment relationship has no firm advance commitment to ongoing work, assessed based on several factors, including:
- Whether the employer can choose not to offer work, and the employee can accept or reject work.
- Whether future work is reasonably likely, considering the nature of the business.
- If there’s a pattern of regular work, but no ongoing work commitment.
What does this mean for you?
This means that even if a casual employee has consistent shifts, as long as there’s no formal commitment for future work, they remain classified as casual.
Contractor and ‘Employee-Like’ Worker Laws in the Gig Economy
If your business involves hiring contractors—especially those in the gig economy like rideshare drivers or food delivery workers—there are a few new things you should be aware of. The rules are tightening around what’s expected in these working relationships.
What’s Changing for Contractors:
- Employee-Like Workers: Contractors who perform work through digital platforms—such as food delivery or rideshare services—are now covered under new protections. These workers, referred to as employee-like workers, will benefit from minimum standards set by the Fair Work Commission.
- Sham Contracting Arrangements: The Fair Work Act has also strengthened protections against sham contracting, where employers attempt to misclassify full-time or part-time employees as casuals to avoid paying entitlements. As of 26 August 2024, it will be illegal for employers to:
- Mislead employees into casual contracts for work that is mostly the same as their full-time or part-time duties.
- Dismiss or threaten to dismiss an employee to rehire them as a casual doing the same work.
Casual Conversion Process
The casual conversion process has been updated to allow eligible casual employees to move into permanent roles. This pathway ensures that long-term casual employees have the opportunity to switch to full-time or part-time employment under specific conditions.
What You Need to Know:
- If a casual employee has worked for your business regularly for 12 months or more, they may now be eligible for permanent employment.
- Employers must offer this conversion or provide valid reasons if it’s not possible.
New Casual Employment Information Statement (CEIS)
Employers are required to provide new casual employees with the Casual Employment Information Statement (CEIS), which includes information on:
- The new casual employee definition.
- How casual employment can be changed (casual conversion).
- How disputes related to casual status are handled by the Fair Work Commission.
The updated CEIS must be provided to all new casual employees before or soon after they begin work, and to existing casual employees after 6 or 12 months, depending on the size of the business.
Staying Compliant with the New Contractor Rules
For businesses that rely on contractors, particularly in the gig economy, these changes are meant to create fair working conditions. The Fair Work Commission now has the power to enforce minimum standards for contractors working in digital platforms or transport services.
What Should You Do Now?
- Review Your Contractor Agreements: Ensure that your contracts comply with the new minimum standards. The days of vague contractor agreements are over!
- Stay Informed About Minimum Standards: These standards include payment terms, deductions, and even termination processes.
How to Stay Compliant
These changes are all about ensuring fairness and clarity in the workplace. Here’s a quick checklist to help you stay compliant:
- Update Employment Contracts: Review and update all casual contracts to reflect the new definition and ensure that workers are properly classified as casual or permanent.
- Check Contractor Agreements: If your business engages contractors, especially in the gig economy ensure that you’re meeting the new minimum standards.
- Issue CEIS Documents: Make sure you’re providing the correct version of the Casual Employment Information Statement to all casual employees.
These changes are designed to protect both casual employees and contractors, ensuring fair work conditions and clarity in employment status. For online business owners, it's crucial to update your employment practices and contracts to align with the new laws and avoid potential penalties.
Want a deeper dive into casual employment for your business?
Check out our blog on Understanding Casual Employment for Creative Employers to learn more about the casual employment structure and best practices.
Stay Updated on Fair Work Changes
These new laws will protect both casual employees and contractors while giving business owners the tools to manage staff more effectively. However, it’s essential to stay on top of future changes, as the workplace landscape is constantly evolving. Make a habit of checking the Fair Work website regularly for updates and any further amendments.
Visit the Fair Work website for more information here.
Need Help? We’ve Got You Covered
At Foundd Legal, we understand how challenging it can be to keep up with changing laws. That’s why we’ve developed a range of legal templates and resources to help you stay compliant. Whether you’re updating casual employee contracts or managing contractor agreements, we’re here to make it easier for you.
