As part of the Fair Work Commission’s four-yearly review of modern awards, on 5 July 2017 the Commission handed down a decision which will allow many more casuals to convert to permanent full-time or part-time employment.
Casual employees are hired on a temporary and often irregular basis. Unlike permanent full-time and part-time employees, casuals are not entitled to certain benefits under the National Employment Standards such as annual and personal leave. To compensate for this, they are often entitled to higher rates of pay.
Some modern awards allow casuals to choose to convert to full-time or part-time employment, subject to certain rules and restrictions. The Commission has decided to insert casual conversion provisions into a further 85 modern awards, opening up a range of new sectors to casual conversion.
The Commission determined that if an individual’s casual employment is long-term in nature, and sufficiently regular, then it is “fair and necessary” to allow those casual employees to access the entitlements of permanent employees.
The Commission has developed a draft model clause for casual conversion. It states that casual employees who have worked a regular pattern of hours on an ongoing basis for 12 months, which could be performed as full-time or part-time work, will be able to elect to become permanent employees.
Employers can refuse a casual employee’s election if:
- it would require a significant adjustment to the casual employee’s hours of work;
- it is known or foreseeable that that casual employee’s position will no longer exist;
- the employee’s hours of work will significantly change or be reduced within the next 12 months; or
- on other reasonable grounds.
The draft conversion clause also requires employers to give all casuals, regardless of whether they work regularly or not, a copy of the conversion clause during the 12-month qualifying period, so that they are aware of their entitlement to convert.
The Commission has invited submissions about the draft model casual conversion clause. Russell Kennedy will provide further updates about the introduction of casual conversion requirements in modern awards once the Commission makes its final decision. It will be important for employers to be aware of, and comply with, any new obligations regarding casual conversion.
In the same ruling, the Commission rejected calls from unions for casual engagement to be a minimum of 4 hours, and instead opted for a 2 hour minimum engagement to apply to the 34 modern awards that do not already contain a minimum shift requirement.