As part of its four yearly review of modern awards, the Fair Work Commission (FWC) has issued a landmark decision that gives award-covered casual employees the right to convert to permanent employment (subject to certain criteria and restrictions).

Employers are likely to be affected by the decision if they have casual employees who:

  • are covered by one of the 85 modern awards listed below that do not currently contain a casual conversion clause and
  • work regular and systematic hours.

The effect of this decision is that, once the casual conversion is included in the 85 modern awards listed below, the vast majority of modern awards will have a casual conversion clause. The decision does not affect employers whose employees are covered by a modern award that already has a casual conversion clause.

Decision

The FWC’s decision, which was handed down on Wednesday (5 July 2017), recognises that modern awards should contain a provision allowing long-term casual employees to elect to convert to full-time or part-time employment. While the FWC is yet to decide on the final form of that new provision, it has published a draft model clause whereby casual employees can request part-time or full-time employment if they have worked a regular pattern of hours for at least 12 months.

Employers will be able to refuse the casual employee’s request on reasonable grounds, including:

  • it would require significant adjustment to the casual employee’s hours of work to accommodate them in full-time or part-time employment under the applicable modern award
  • it is known or reasonably foreseeable that the casual employee’s position will cease to exist or
  • the employee’s hours of work will significantly change or be reduced within the next 12 months.

The FWC will be taking submissions in relation to the draft model clause and therefore, the right to request conversion to part-time or full-time employment will not take effect immediately.

A list of modern awards that will be affected by the FWC’s decision is included below. Employers with casual employees covered by any one (or more) of these awards should start thinking about how their businesses may be affected by the proposed clause, particularly if they have long-standing casual employees who work regular and systematic hours.