Significant employment law changes commence this week

Significant changes have commenced as of 26 August 2024, following amendments made to the Fair Work Act 2009 (Cth) (Act) by the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024.

Two of the most pressing changes for employers are the introduction of the right to disconnect, and changes to casual employment.

What is the right to disconnect?

Before considering what the right to disconnect is, it may firstly be helpful to outline what the right to disconnect is not. The right to disconnect does not prevent employers from contacting their employees outside of the employee’s normal working hours.

The right to disconnect instead gives employees the right to refuse to monitor, read, or respond to communications from their employer (or third parties related to their employment, such as suppliers) outside of their working hours, unless that refusal would be unreasonable. This entitlement is also a workplace right under the general protections provisions of the Act, ensuring that employees who reasonably decline after-hours contact are not subjected to adverse action by their employers.

When determining whether an employee’s refusal to respond to out-of-hours contact is reasonable, there are a number of factors to take into consideration. These factors include, but are not limited to:

• the reason for the contact;
• how the contact is made and how disruptive it may be to the employee, including how it may impact family or carer’s responsibilities;
• whether the employee is compensated for being available for out-of-hours contact or working additional time;
• the purpose of the communication; and
• the specific responsibilities associated with the employee’s role.

If there is a dispute regarding the right to disconnect, employees and employers must firstly try to resolve this at the workplace level. If the dispute cannot be resolved, both employees and employers can ask the Fair Work Commission (Commission) to deal with the dispute. The Commission may make orders, such as requiring an employee to respond to contact, or requiring an employer not to make contact, outside of normal working hours.

Changes to casual employment

Prior to 26 August 2024, an employee was considered a casual employee where the employer made them an offer on the basis of there being no firm advance commitment to continuing and indefinite work according to an agreed pattern of work, and the person accepted the offer on that basis and became an employee.

The new definition of casual employment takes the emphasis away from the contract of employment and considers whether the employment relationship is characterised by the absence of a firm advance commitment to continuing and indefinite work, and whether the employee is, or would be, entitled to a casual loading or casual rate of pay.

The Act provides guidance on whether the employment relationship is characterised by the absence of a firm advance commitment to continuing and indefinite work. That includes what the contract says about the employment relationship, but it also includes consideration of:

• What is the real substance, practical reality and true nature of the relationship? In other words, do the parties operate as though it is a casual employment relationship, or a permanent employment relationship?
• Whether the employer can choose to offer shifts or not.
• Whether the employee can choose to accept or reject shifts or not (and whether this, in fact, occurs).
• Whether it’s likely there will be more work in the future of the kind that the employee is performing.
• Whether there are permanent employees performing the same or similar work in the business.
• Whether there is a regular pattern of work for the employee. Although the Act does note that the presence of a pattern of work is not on its own an indication of whether there is a firm advance commitment to continuing and indefinite work.

Employers should note that employees who were casual employees prior to 26 August 2024 will remain casual employees post 26 August, unless they are converted to permanent employment through a casual conversion process, or otherwise accept an offer of permanent employment.

Casual employment information statement

The Fair Work Ombudsman publishes the Casual Employment Information Statement (CEIS), and the Act requires that this document be provided to all casual employees upon commencement of employment. From 26 August, employers are also required to provide a copy of the CEIS to casual employees at regular intervals throughout their employment.

For small businesses, the requirement is to provide the CEIS as soon as reasonably practicable on commencement of employment, and again after 12 months of employment.

For non-small businesses the requirement is to provide the CEIS as soon as reasonably practicable on commencement of employment, again after 6 months of employment, 12 months of employment, and on every subsequent 12-month anniversary of employment thereafter.

Casual conversion process

Further changes have been made to the casual conversion process. The new casual conversion pathway is employee-led: eligible casual employees can notify an employer that they don’t believe they meet the definition of a casual employee, and are therefore converting to permanent employment.

The eligibility requirements to make this notification are:

• The employee has to meet the minimum employment engagement period, which is 6 months for non-small businesses, or 12 months for a small business employer;
• The employee cannot currently be engaged in a dispute over their employment status, or had notification refused or dispute resolution conducted within the last 6 months; and
• The employee must want to change their employment status to full-time or part-time employment.

Employers have an obligation to consult with employees who make a request using this new pathway, and will have 21 days to respond to a notification from the employee.

If the employer accepts the notification, they are required to respond in writing to tell the employee what type of employment they will be converted to (full-time or part-time), say when the change will take effect, and let the employee know their hours of work.

Importantly, whilst the language in the Act has changed to be one of notification, rather than a request, there are grounds for refusing to convert a casual employee making a notification to permanent employment. If the employer doesn’t accept the notification, the response must be in writing, and set out reasons for the decision.

There are 3 grounds for not accepting the notification:

• The employer still believes the employee meets the definition of a casual employee;
• Accepting the notification would mean the employer is not complying with a recruitment or selection process required by law; or
• The employer has fair and reasonable operational grounds for refusing the notification.

Whilst there is no definition of ‘fair and reasonable operational grounds’ the Act gives some indication of what may constitute a refusal based on these grounds:

• Accepting the notification would require substantial changes to the way in which work in the employer’s enterprise is organised;
• Accepting the notification would significantly impact the operation of the employer’s enterprise; or
• Substantial changes to the employee’s terms and conditions would be reasonably necessary to avoid breaching a modern award or enterprise agreement if the notification were accepted.

The Commission has powers to deal with disputes about casual conversion. First the employer and the employee have to try and resolve a dispute at the workplace level, if it is not resolved at the workplace level then the dispute can be referred to the Commission for mediation, conciliation, or arbitration if the dispute remains unresolved.

What should employers do in light of these changes?

For many employers, the introduction of the right to disconnect may not pose significant changes to their way of working. However, some steps you may choose to take to prepare your organisation are:

• Assess whether there are certain roles that are likely to receive out of hours contact, particularly those where the employer may not have visibility over the amount of contact, such as store managers.
• Conduct education with leaders at all levels of the business on the right to disconnect, assessing what is reasonable refusal, and how they can ensure they do not take adverse action against employees exercising this workplace right.
• Review your workplace policies to ensure they are not contrary to the right to disconnect.
• Ensure contracts outline where a role may require an employee to work additional hours or be contactable outside of ordinary working hours.
• Familiarise yourself with the right to disconnect term that has been inserted into each of the modern awards that cover your employees.

Although the right to disconnect does not prevent employers from making contact with employees, it is an apt time to consider the psychosocial hazards that may exist where employees are receiving frequent out-of-hours contact and seek ways to minimise the impact of this. This could be by:

• Educating employees who are not required to respond to out-of-hours contact on how to mute notifications on work devices;
• Incorporating messaging on emails that informs employees that even where they receive an email out-of-hours, they are not required to respond; or
• Ensuring non-urgent, out-of-hours emails are scheduled to be sent during working hours.

To ensure you are compliant with the changes to casual employment, we recommend:

• Reviewing contracts of employment for casual employees to ensure they reflect that employment is on the basis of an absence of a firm advance commitment to continuing and indefinite work, and that the casual loading is clearly identified.
• Train those who are responsible for rostering employees on the nature of casual employment to ensure they are rostered as such.
• Establish a mechanism for ensuring the CEIS is provided to casual employees at the required intervals.
• Continue with the current casual conversion pathways through the transitional period for casual employees who commenced work prior to 26 August 2024, which ends on 26 February 2025.

If you require guidance or assistance on any of the recent legislative changes, please contact our Workplace Relations team via the National Retail Association’s hotline on 1800 RETAIL (738 245). You can access recordings of our recent webinars regarding the right to disconnect and the changes to casual employment on our member portal.