As part of the Closing Loopholes reform, recent changes to Australia’s industrial relations laws came into effect on 26 August 2024. One such change relates to the definition of casual employment. And because retail businesses rely heavily on the engagement of casual staff, it’s crucial that you understand your compliance obligations – this will require careful workforce management and policy adjustments to mitigate legal and operational risks.

The definition of casual employment is no longer based solely on the initial offer of employment or the terms of the written contract; instead the definition is based on the real substance and true nature of the employment relationship. That is, a casual employee is classified as a casual employee if they have no firm advance commitment to ongoing work and they are entitled to receive a casual loading.

An important consideration in the determination of whether the employment relationship is one which is characterised by an absence of a firm advance commitment to continuing and indefinite work is whether the employee has the ability to accept and reject shifts. Importantly, an employee working a regular pattern of shifts may still be lawfully classified as a casual employee if there is no firm advance commitment to ongoing work.

Retailers can take some comfort in knowing that a casual employee will remain a casual employee until the employee converts to full-time or part-time employment or is ordered to do so by the FWC.

The new ‘employee choice pathway’ introduces a simplified process for casual employees to convert into part-time or full-time roles. Retail workers can now request conversion after just six months of continuous work, or 12 months if they work for a small business. Employers must respond within 21 days and can only reject such requests on ‘fair and reasonable’ operational grounds.

If the causal employee’s request for conversion is granted, then they will cease receiving the casual loading and instead start to receive relevant permanent entitlements such as access to paid leave.

The reforms also impose increased administrative burdens on retailers, requiring them to provide casual employees with the Casual Employment Information Statement multiple times throughout their employment. Failure to comply could expose employers to legal claims, further complicating workforce management.

Retailers must review contracts and policies to ensure they align with the new definition and casual conversion processes. The relevant times an employer must provide a casual employee with the Casual Employment Information Statement include:

  • upon commencement of employment;
  • after the employee has bene employed for 12 months; and
  • at the end of any subsequent period of 12 months for which the employee is employed.

For small business, this obligation only extends to providing the statement upon commencement of employment and again after 12 months.

Proactive planning is essential to avoid misclassifying employees, which could lead to backpay claims or penalties. Managers will need to be trained on how to handle conversion requests, assess operational needs, and communicate changes to their workforce.

However, retailers should not be alarmed by this new casual definition. The new definition does not prohibit the engagement of casual staff, nor does it make the engagement of casual staff more complex. If you are engaging a casual employee to genuinely plug operational gaps and take on additional, surplus shifts which arise during peak periods (ie. over the Christmas period), it is likely that the employee’s employment relationship is one which is characterised by an absence of ongoing and indefinite work.

Furthermore, as mentioned, a casual employee who is initially engaged as a casual employee, will continue to remain as a casual employee unless s specified event occurs, such as the employee requests to convert to permanent employment or the FWC orders the conversion of the employee.

Ultimately, these changes reflect a broader shift toward balancing workforce flexibility with employee rights. However, if not carefully managed, they could lead to increased legal exposure, higher staffing costs, and disruptions to retail operations.

Amanda Curatore is senior associate and solicitor at Citation Group.