As of August 26, 2024, significant changes to casual employment laws in Australia took effect under the Closing Loopholes (No 2) Amendments. 

These changes will impact all employers, including those in the allied health sector. While we see most Physiotherapists, Chiropractors, Occupational Therapists, Exercise Physiologists and Osteopaths employed Full Time when they are hired – we definitely see a tendency for Remedial Massage Therapists, Allied Health Assistants (especially those who are students) and some reception and administrative staff start out as casual employees. 

Understanding these new regulations is crucial for compliance and to ensure that your practice can continue to thrive in a competitive landscape.

Understanding the Changes to Casual Employment

There is a revised definition of casual employment and new responsibilities for employers regarding their casual staff. Here’s a closer look at the key changes that will affect your practice:

Revised Definition of Casual Employment
Under the new regulations, an employee is classified as casual if:

• the employment relationship has no firm advance commitment to ongoing work, taking into account a number of factors, and
• they’re entitled to a casual loading or specific casual pay rate under an award, registered agreement, or employment contract.

This shift means that the emphasis is now on the practical reality of the employment relationship. The other factors that must be considered include whether:

• the employer can offer or not offer work to the employee (and whether this is happening)
• the employee can accept or reject work (and whether this is happening)
• it’s reasonably likely there will be future work available of the kind the employee usually performs in the employer’s business, based on the nature of the business
• there are full-time or part-time employees performing the same kind of work in the employer’s business as the work the employee usually performs
• the employee has a regular pattern of work even if it changes over time due to, for example, reasonable absences because of illness, injury or other leave.

Employee Choice Framework
The previous obligation for employers to offer casual conversion to permanent employment is changing to the “Employee Choice Pathway”. 

Casual employees hired on or after August 26, 2024, will have the right to give notice to convert to permanent status after working for six months (or 12 months in a small business) or if they believe they no longer meet the definition of a casual employee.

This means employers no longer have an obligation to “offer” conversion. 

Responding to a Request
Employes must consult with the employee which includes discussing what will change including whether the employee would be full-time or part-time, what their hours of work would be and when the change would take effect. 

Employers must respond to these requests within 21 days and can only deny them for valid reasons outlined in the Act. Valid reasons include: 

• the employee still meets the definition of a casual employee
• there are fair and reasonable operational grounds for not accepting the notification, such as:
  • substantial changes would be required to the way work in the employer’s business is organised
  • there would be significant impacts on the operation of the employer’s business, or
  • substantial changes to the employee’s employment conditions would be necessary to ensure the business complies with relevant Award/s

Updated Casual Employment Information Statement (CEIS)
Employers are now required to provide the CEIS to casual employees at the start of employment, after six months, then at 12 months, and annually thereafter. This document must clearly explain the new definitions and rights regarding casual employment.

We suggest that you put a calendar reminder in your diary to send this out to your employee, if they haven’t converted to permanency at this stage. 

Anti-Avoidance Provisions
New provisions will prevent employers from dismissing or threatening to dismiss permanent employees to rehire them as casuals for the same work. 

New anti-avoidance provisions will be introduced to prevent employers from:

• dismissing or threatening to dismiss a permanent employee to rehire them as a casual for the same or similar work; and
• making false claims to persuade a permanent employee to accept a casual employment contract for the same or substantially the same work.

Courts may impose penalties for breaching these provisions, with maximum penalties of $93,900 for individuals; and $469,500 for businesses.

Things to Keep In Mind 

An employee changing from casual to permanent will only occur if the employee accepts the change – you can’t force them to become permanent employees, it is their choice. 

Just because the onus is on the casual to provide you notice they want to become permanent – it doesn’t negate your ability to offer them permanent employment at any time that is appropriate for your business. 

While business owners often like casual employment for the flexibility, there are also a lot of benefits to having permanent employees:

• Stability and Reliability: Permanent employees provide a consistent and reliable workforce, reducing turnover and fostering a cohesive team environment.
• Improved Client Relationships: Continuity of care with permanent employees enhances client satisfaction and loyalty, which is crucial in the allied health sector.
• Enhanced Engagement and Loyalty: They are typically more invested in the organization, leading to higher levels of employee engagement, motivation, and performance.
• Knowledge Retention and Expertise: Permanent staff accumulate valuable knowledge and skills over time, which is essential for maintaining service quality in allied health.
• Cost-Effectiveness: Although the upfront costs may be higher where you have to guarantee hours before their caseload is full (if they didn’t start as a casual employee), you also avoid the casual loading and have guaranteed hours you can schedule in training and have them working on other business development activities. 

Strategies for Compliance and Adaptation

To navigate these changes successfully, allied health businesses should consider implementing the following strategies:

1. Review Employment Agreements
   Take time to assess your current casual employment agreements. Ensure that they comply with the new definition of casual employment. If your staff have established patterns of work, consider whether they may need to be reclassified to avoid compliance issues.
2. Provide Clear Communication
   Ensure your casual staff are informed of their rights under the new framework. Providing the CEIS on commencement, after 6 months, after 12 months and annually thereafter (if they have not chosen to become permanent) . 

Focus on the benefits to them of becoming permanent – display wage costs on an annualised basis taking into account that they would only work around 46 weeks per year so while their hourly rate is slightly higher as a casual, their annualised wage is very similar as they will be paid for leave. 

3. Strategically Time the Transition
   Consider getting on the front foot and offering permanency when it suits the business rather than waiting for employees to ask. 

If they are working 32 hours per week and are 80% + booked already and you want to offer full time employment, now is a great time to take the leap. They’ll see a decrease in hourly rate, but still an overall increase in their weekly rate with the change in hours. Plus their annualised rate will of course see them better off overall. 

Sometimes it is about perception and how to “sell” it to the employee. 

If you are unsure about your obligations or how to make this work in practice, get in touch and we can support you with strategies on how to proceed. 

We can also help you work out wage costs and how to present the information to your employee in a mutually beneficial way.