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Casual Conversion Decision – hurry up and wait

Employees will have the right to request permanent positions once they have worked as a casual for 12 months.

As part of the ongoing four-year review of the Modern Award system, the Fair Work Commission has determined to give employees across most industries and occupations the right to request permanent employment status after 12 months of regular and systematic employment. This decision was the result of various unions launching a claim back in 2014 seeking mandatory conversion of all casual employees to permanent positions after six months of regular work with one employer.

Those unions had also sought a mandatory four-hour minimum engagement for casuals. However, on that issue, the Commission determined that for those Modern Awards not already containing a minimum engagement period clause, a two-hour minimum period will be interleaved. Further, it was also sought to make any related error by an employer as to the applicability of such casual conversion indefensible, inexcusable and with a possible $10,000 fine attached. This part of the application also failed.

To implement its decision on casual conversion, the Commission has proposed a model provision for interleaving into 85 of the approximately 122 Modern Awards to determine whether a casual employee is eligible for conversion to permanent status (full-time or part-time).

What will this decision mean for your business?

The final wording of the model clause is yet to occur, in fact it is not expected until at least August this year. Although the glacial pace of the Award review process leaves me feeling that it might not be until later this year, so this gives business some time to consider the issue and its effect on their business.

Numerous employment awards already contain provisions requiring employers to offer casual employees conversion to permanent employment status after six months. Those awards will not have their pre-existing conversion clauses varied because of this decision.

However, and of importance to C&I readers, the General Retail Industry Award covering most retail sector employers and employees will be effected by this decision. This contrasts with the Award covering sales employees engaged as console operators at retail petrol outlets already containing a term requiring the consideration of this issue at 6 months of employment.

Whatever the final drafting of the clause, employers will be responsible for providing their casual employees with a copy of the conversion clause contained within the relevant Award before the completion of the first 12 months of their engagement.

Employers will be able to refuse a request to convert on “reasonable grounds”. Although that phrase has not been carved in stone, those grounds of refusal will include:

  • that permanency would require “significant adjustment” to a casual employee’s hours of work and or other terms of employment; or
  • the employer can reasonably ‘foresee’ the position will no longer exist in the next 12 months.

Therefore, any casual employee engaged to work on an occasional, non-systematic and or irregular basis will likely continue to be exempted from a right to convert.

If this issue arises in your business, be prepared with the facts and discuss the issues with any affected employees clearly and carefully. Casual employees wishing to convert should be advised that their casual loading (usually somewhere between 17% to 25%) will no longer be payable upon becoming a permanent employee. Further, consider what options are available such as offering Individual Flexibility Agreements to keep relevant and necessary flexibilities in the workplace. If casual employees chose not to become permanent it is recommended both the offer and the non-acceptance be put in writing. As always, if in doubt seek advice.


Written for C&I by Charles Watson, Workforce Guardian


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