Six things every employer in the retail industry must know

It’s been a huge year for change, with Australia’s industrial relations framework undergoing the most significant overhaul since the introduction of the Fair Work Act (Cth) 2009 15 years ago. The latest of these changes came into place on 26 August 2024, bringing sweeping reforms to casual employment laws.

Did you know that the retail sector accounts for nearly 9.7 per cent of the Australian workforce?Employing over 1.3 million workers, the retail industry is rapidly expanding, and so are retail hiring trends. This demands proactive workforce management and policy adjustments to reduce legal and operational risks. With a heavy reliance on casual employment in retail, business owners must stay on top of compliance obligations.

So, let’s start with what’s changed

1. Casual employment definition

The definition of casual employment has shifted to focus on the real substance, practical reality and true nature of the employment relationship rather than just the initial offer or written contract terms. A casual employee is classified as such if there is no firm advance commitment to ongoing work and they receive a casual loading. Key indicators include the employee’s ability to accept or decline shifts and whether it is reasonably likely that there will be future availability of continuing work. It is important to remember that while consideration of whether there is a regular pattern of work for the employee is relevant to the determination of whether the employee is defined as a casual employee or not, a regular pattern of work on its own does not indicate that an employee has a firm advance commitment to ongoing work and therefore an employee who has a regular pattern of work may still be defined as a casual employee. Retailers can be reassured that a casual employee remains classified as casual unless they convert to full time or part-time employment or are directed to do so by the Fair Work Commission.

2. Brand-new employee choice pathway

The new employee choice pathway simplifies the process for casual employees to transition into part-time or full-time roles. Retail workers can request conversion after six months of continuous work, or 12 months if employed by a small business. Employers must respond within 21 days and can only decline requests on fair and reasonable operational grounds. If approved, the employee transitions to permanent status, forfeiting casual loading but gaining entitlements like paid leave.

3. Additional obligations

The reforms introduce additional administrative responsibilities for retailers, requiring them to provide casual employees with the Casual Employment Information Statement (CEIS) at specific stages of their employment. Non-compliance could lead to legal claims, making it essential for retailers to review contracts and policies to ensure alignment with the new definition and casual conversion processes.

Employers must provide the CEIS:

• Upon commencement of employment; and
• After the employee has been employed for 6 months; and
• After the employee has been employed for 12 months; and
• At the end of every subsequent 12-month period of employment.

For small businesses, this requirement applies only at commencement and after 12 months of employment.

Here’s what you need to remember about retail casual workforce management

When recruiting, employers must ensure that these roles are genuinely casual and align with the new casual employment definition.

Employers must identify the applicable award or enterprise agreement to determine correct pay rates, penalty rates, overtime, and any additional loadings, especially given the extended hours typical of the holiday period.

Accurate classification of these roles is essential to ensure compliance with standards and prevent potential underpayment issues. To navigate these requirements effectively, employers must remember these key points:

• Fair and just hiring process: avoid biases based on age, gender, ethnicity, or disability unless essential to the role.
• Key employment information: share the Fair Work Information Statement and the Casual Employment Information Statement with all new hires.
• Employment terms in all contracts: clearly outline the casual nature of the role, including entitlement to casual loading, the absence of guaranteed hours, and no promise of work after the holiday season. Having water-tight casual employment contracts in the retail industry is crucial to avoid risks and meet your compliance obligations.
• Minimum engagement periods: comply with award or agreement stipulations for minimum shift lengths, typically two to three hours for casual employees.

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