Section 15A Fair Work Act: New Casual Employee Definition (Aug 2024)
How section 15A of the Fair Work Act defines a casual employee from 26 August 2024 under the Closing Loopholes No. 2 reforms — the objective 4-factor test.
What changed on 26 August 2024
The Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 substantially rewrote section 15A of the Fair Work Act 2009. This new definition of a casual employee took effect on 26 August 2024. The amendment is a key element of the Albanese Government's Closing Loopholes reforms, aimed at addressing concerns about employee misclassification. Closing loopholes employee vs contractor test
The previous definition, introduced in 2021 following the *Rossato/Skene* decisions, centred on whether an employer had a firm advance commitment regarding ongoing work at the time of offer and acceptance of employment. This has been replaced by an objective test.
The new test examines the real substance, practical reality, and true nature of the employment relationship to determine whether an employee is genuinely casual. This shift moves away from a focus on the employer’s intentions at the outset and considers the overall working arrangement. Casual conversion 2024 employee choice
The objective 4-factor test
The Fair Work Act now defines a casual employee through a four-factor test outlined in s 15A(1). To be classified as a casual employee, the employment relationship must lack a firm advance commitment to continuing and indefinite work. This must be coupled with the employee being entitled to a casual loading or specific casual rate of pay under an applicable award, enterprise agreement or contract. Casual conversion 2024 employee choice
Section 15A(2) emphasises that the assessment goes beyond the written contract. It requires consideration of the real substance, practical reality and true nature of the employment relationship. Indicators relevant to the absence of a firm advance commitment include the employer’s ability to offer work and the employee’s ability to accept or reject it, the anticipated frequency of future work, the employment status of other employees performing similar roles, and the existence of a regular pattern of work.
Importantly, no single factor is decisive. The determination of casual status is a multi-factorial assessment, based on a comprehensive evaluation of the totality of the employment relationship.
Employee choice pathway to permanent
The Closing Loopholes No. 2 Act introduced a new ‘employee choice’ pathway Casual conversion 2024 employee choice under Division 4A of Part 2-2 (ss 66AAA-66M). This replaces the previous employer-initiated casual conversion regime in most instances. This pathway allows eligible casual employees to request a transition to permanent employment.
From 26 August 2024, casual employees can provide written notification to their employer indicating they believe they no longer satisfy the definition of a casual employee and desire to move to permanent employment. The timeframe for eligibility varies; small business employees can make this notification after 12 months of employment, while other employees can do so after 6 months.
Following receipt of a notification, the employer must respond within 21 days. This response must include consultation and will either accept the change to permanent employment or refuse the request, with refusal permitted only for reasons specified in s 66AAC.
Consequences and protections
The introduction of the new casual employee definition brings specific consequences and protections for both employers and employees. Employers are now required to provide a new Casual Employment Information Statement at key intervals: upon commencement, and again at 6 and 12 months. This statement ensures employees are informed about their casual employment status and related entitlements. Casual loading 25 percent explained
To prevent employers from structuring employment to avoid casual conversion obligations, section 359A creates general protections. This means employers cannot engage in conduct designed to circumvent the requirements of the new definition. Furthermore, section 545A addresses situations where a casual loading has been paid. If an employee is subsequently determined to have been a permanent employee, courts can order compensation to prevent what is termed 'double-dipping'.
Disputes relating to the operation of the casual definition and employee choice provisions can now be addressed through the Fair Work Commission (FWC). New jurisdiction is established under section 66M, providing a pathway for resolving disagreements and ensuring compliance with the revised legislation.
Frequently asked
Can long-serving casuals automatically convert under the new s 15A?
No. There is no automatic conversion. The new s 15A defines who is a casual based on the substance of the relationship, and Division 4A creates an employee choice pathway — but the employee must give written notification and the employer must respond. Small business employees can notify after 12 months; others after 6 months.
Does the new test apply to existing casuals from before 26 August 2024?
Yes. The new s 15A applies prospectively to all casual employment relationships from 26 August 2024, including those that commenced earlier. However, employees who were assessed as casual under the previous test continue to be casual unless and until they give a choice notification or the relationship changes.