New changes to casual employment
In a landmark ruling, the Fair Work Commission has granted casual workers right to convert to permanent employment if they work regular hours (part-time or full-time) over 12 months.
From 1 October 2018, a model ‘casual conversion’ clause will be included in approximately 80 modern awards, including awards such as the Banking, Finance and Insurance Industry Award 2010, the Cleaning Services Award 2010, the Clerks – Private Sector Award 210, Fast Food Industry Award 2010, General Retail Industry Award 2010, Professional Employees Award 2010, and the Restaurant Industry Award 2010 (amongst others). The clause means that employers must notify casual employees of their right to convert to permanent employment by providing a copy of the applicable casual conversion clause to all casual employees:
- by 1 January 2019 (if the employee is employed as at 1 October 2018), or
- within the first 12 months of the employee’s first engagement (if that is after 1 October 2018).
The clause is intended to apply to employers in the labour hire sector in the same way as it applies to any other employer.
Read the full decision here.
WHEN IS AN EMPLOYEE ENTITLED TO CASUAL CONVERSION?
To be eligible for casual conversion, an employee:
- Must have worked for the employer for a period of 12 months or more; and
- Over the preceding 12 months, have worked a pattern of hours on an ongoing basis, which they could continue to perform as a full time or part time employee, without significant adjustment.
For example, an employee consecutively works an average of 20 hours per week over 12 months.
Conversely, employees who have worked irregular shifts patterns or hours may be ineligible.
WHAT ARE YOUR OBLIGATIONS AS AN EMPLOYER?
Under the new model casual conversion clause, an employee must provide all casual employees (whether they become eligible for conversion or not) with a copy of the casual conversion clause within the first 12 months after their initial employment.
What if an employee wishes to convert to permanent employment?
If an employee seeks to convert their casual employment into permanent employment (whether full or part time), the employer can only refuse the request:
- if the employer has consulted with the employee,
- on the basis of ‘reasonable business grounds’ (which are described in the model award clause).
Employers are required to provide reasons for their decision within 21 days of the request being made. Care should be taken in the preparation of any such refusals as they may otherwise be used in breach of award or other proceedings against the employer.
Disputes regarding requests for casual conversion can be taken to the Fair Work Commission.
As of 1 October 2018, employers who have casual employees should:
- Check the applicable modern award to determine their obligations, familiarise themselves with them and ensure compliance.
- Provide all casual employees with a copy of the conversion clause within the required timeframe.
Seek professional legal advice if you have any questions in relation to your obligations to your casual employees.
RECORD KEEPING FOR EMPLOYERS
Eligible employees seeking casual to permanent conversion, must make their request in writing to their employer. Similarly, if a request is granted following a discussion with the employees, the employer must record the conversation in writing. All such correspondence should be kept on the individual employee’s personnel file.
Employers should diarise 12-monthly internal reviews of their casual employees to ensure compliance with the time frame stipulated by the Fair Work Commission, particularly if your company has expanded.
