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Employment Law | Requests for Conversion From Casual to Permanent Reality for Thousands of Employers

JULY 2017

On Wednesday, a Fair Work Commission Full Bench ruled that subject to certain rules and restrictions, modern awards will provide casual employees the option to elect to convert to full-time or part-time.

The Commissions findings included that:

The permanent denial to the casual employee of the relevant NES entitlements at the election of the employer in those circumstances may ... operate to deprive the NES element of the safety net of its relevance and thereby give rise to unfairness.

A draft model clause has been developed by the Commission. This ‘casual conversion clause’ is to be inserted into 85 modern awards, including retail, restaurant, banking, aged-care and agriculture industries.

The draft clause which is still being considered will allow casuals to convert if:

  • they have been engaged over a 12-month period;
  • they have a worked a pattern of hours on an ongoing basis; and
  • the pattern of hours worked could continue to be performed on a full-time or part-time basis.

An employer will be able to refuse the conversion if:

  • conversion would involve significant adjustment to the casual employee’s hours;
  • it is known or foreseeable that the casual employee’s position is going to cease to exist;
  • the casual employee’s hours of work are to significantly change or be reduced within the next 12 months; or
  • there are other reasonable grounds.

How this will work in practice remains to be seen. Both employer and employee associations are claiming a ‘victory’. However, what is apparent is the potential for this decision to have a significant impact on employers with a highly casualised workforce.

In light of this landmark ruling, employers with award covered staff should start to consider:

  • the hours and pattern of work of their casual employees;
  • the importance of keeping track of a casual employee’s length of service; and
  • the likely obligation to provide casual employees with a copy of the conversion clause within 12 months of their initial engagement.

Further Questions

If you have any questions about the issues raised in this article, particularly if you are unsure if this development is relevant to you, please contact one of our Workplace Relations, Employment and Safety team specialists below.

Disclaimer

The content of this newsletter is for general information purposes only and should in no way be treated as formal legal advice.