Casual conversion changes from Oct 1 2018

 

Fair Work has introduced a casual conversion which may affect your rights and obligations as an employer from Oct 1 2018.  It was integrated into 85 awards, giving some casual workers the right to request part-time or full-time employment if they have worked certain, regualr hours over a 12-month period.

Business owners who employ casual staff now need to consider provisions that allows casual staff to covert to secure employment entitlements, particularly in the updated awards such as:

  • Hospitality Industry (General) Award 2010;
  • Food, Beverage and Tobacco Manufacturing Award 2010;
  • Manufacturing and Associated Industries and Occupations Award 2010;
  • Building & Construction General On-site Award 2010;
  • Concrete Products Award 2010;
  • Electrical, Electronic & Communications Contracting Award 2010;
  • Graphic Arts, Printing and Publishing Award 2010;
  • Plumbing and Fire Sprinklers Award 2010;
  • Textile, Clothing, Footwear and Associated Industries Award 2010; and
  • Vehicle Manufacturing, Repair, Services and Retail Award 2010

 

What does it mean for your business?

The Casual Conversion decision means that casual employees covered by 85 of the modern awards will have the right to request full-time or part-time employment after working as a regular casual for at least 12 months with an employer. It is noted that many modern awards already had casual conversion provisions. Effectively it gives an employee the ability to ‘convert’ casual employment to part-time or full-time employment and receive all the entitlements that follow.

Employers can refuse the request in writing on reasonable grounds, including that it would require a significant adjustment to a casual employee’s hours of work or they could foresee their position would no longer exist in the next 12 months.

Leading points regarding casual conversion

  • The term does not have the result of obliging employers to offer permanent employment to eligible casual employees; rather it has the result of entitling eligible employees to request conversion to permanent employment.
  • To request casual conversion:
    • the employee must have worked for the employer for a period of 12 months or more; and
    • the employee must, over the preceding 12 month period3, 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.
  • Employees engaged for short periods and/or who work irregular shifts or hours will not meet the criteria to convert.
  • Due to the wording of the model term which includes the words “in the preceding period of 12 months worked…”, the right to request conversion does not arise as a “one off” event, but is a continually exercisable right while an employee has worked the relevant pattern of hours.
  • Eligible employees seeking to convert are required to make a request to the employer in writing.
  • Employers can reject a request, provided that there has been consultation with the employee andthere are reasonable grounds based on facts which are known or reasonably foreseeable (for instance, where the casual employee’s position could cease or the hours could significantly change).
  • A refusal must be put in writing with the reasons set out clearly.
  • If the employee seeks to challenge the employer’s refusal, then this will be resolved through the dispute resolution provision of the Award.
  • If a request is granted, it:
    • must be discussed and recorded in writing; and
    • will begin at the commencement of the next pay cycle.

 

Casual coversion – a model term in the amended Modern Award

Right to request casual conversion

  1. A person engaged by a particular employer as a regular casual employee may request that their employment be converted to full-time or part-time employment.
  2. A regular casual employee is a casual employee who has in the preceding period of 12 months worked a pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to perform as a full-time employee or part-time employee under the provisions of this award.
  3. A regular casual employee who has worked equivalent full-time hours over the preceding period of 12 months’ casual employment may request to have their employment converted to full-time employment.
  4. A regular casual employee who has worked less than equivalent full-time hours over the preceding period of 12 months’ casual employment may request to have their employment converted to part-time employment consistent with the pattern of hours previously worked.
  5. Any request under this subclause must be in writing and provided to the employer.
  6. Where a regular casual employee seeks to convert to full-time or part-time employment, the employer may agree to or refuse the request, but the request may only be refused on reasonable grounds and after there has been consultation with the employee.
  7. Reasonable grounds for refusal include that:
    1. it would require a significant adjustment to the casual employee’s hours of work in order for the employee to be engaged as a full-time or part time employee in accordance with the provisions of this award – that is, the casual employee is not truly a regular casual employee as defined in paragraph (b);
    2. it is known or reasonably foreseeable that the regular casual employee’s position will cease to exist within the next 12 months;
    3. it is known or reasonably foreseeable that the hours of work which the regular casual employee is required to perform will be significantly reduced in the next 12 months; or
    4. it is known or reasonably foreseeable that there will be a significant change in the days and/or times at which the employee’s hours of work are required to be performed in the next 12 months which cannot be accommodated within the days and/or hours during which the employee is available to work.
  1. For any ground of refusal to be reasonable, it must be based on facts which are known or reasonably foreseeable.
  2. Where the employer refuses a regular casual employee’s request to convert, the employer must provide the casual employee with the employer’s reasons for refusal in writing within 21 days of the request being made. If the employee does not accept the employer’s refusal, this will constitute a dispute that will be dealt with under the dispute resolution procedure in clause X. Under that procedure, the employee or the employer may refer the matter to the Fair Work Commission if the dispute cannot be resolved at the workplace level.
  3. Where it is agreed that a casual employee will have their employment converted to full-time or part-time employment as provided for in this clause, the employer and employee must discuss and record in writing:
    1. the form of employment to which the employee will convert – that is, full-time or part-time employment; and
    2. if it is agreed that the employee will become a part-time employee, the matters referred to in clause X.
  1. The conversion will take effect from the start of the next pay cycle following such agreement being reached unless otherwise agreed.
  2. Once a casual employee has converted to full-time or part-time employment, the employee may only revert to casual employment with the written agreement of the employer.
  3. A casual employee must not be engaged and re-engaged (which includes a refusal to re-engage), or have their hours reduced or varied, in order to avoid any right or obligation under this clause.
  4. Nothing in this clause obliges a regular casual employee to convert to full-time or part-time employment, nor permits an employer to require a regular casual employee to so convert.
  5. Nothing in this clause requires an employer to increase the hours of a regular casual employee seeking conversion to full-time or part-time employment.
  6. An employer must provide a casual employee whether a regular casual employee or not, with a copy of the provisions of this clause within the first 12 months of the employee’s first engagement to perform work. In respect of casual employees already employed as at 1 October 2018, an employer must provide such employees with a copy of the provisions of this subclause by 1 January 2019.
  7. A casual employee’s right to request to convert is not affected if the employer fails to comply with the notice requirements in clause XX(p).

 

What should your business do next?

It’s important to keep in mind that Fair Work’s decision does not require businesses to convert casual employees in all cases where a casual employee makes a request for conversion to their employer.  For this reason, it’s important to understand the criteria for casual conversion and understand what your obligations are when employees meet these requirements.

If you or your business falls under the new clause, here are the steps you can take to stay compliant:

  1. Check your modern award or enterprise agreement. Awards with existing clauses for casual conversion may have different requirements. Check your award for the exact rules in your industry.
  2. Create a casual conversion letter. The Fair Work website has template letters for various industries.
  3. Notify your employees. Make sure you give your casual staff (employed as of 1 October 2018) a copy of the final letter.
  4. Record the outcome of the casual conversion offer. Whether they accept or reject the offer, keep copies of their written responses for future reference.

 

If you are unsure how the casual conversion clause affects your business, call the Fair Work Infoline on 13 13 94 or visit www.fairwork.gov.au

Casual Conversion