Following a recent full bench decision of Australia's Fair Work Commission, award covered casual employees will soon have the right to elect to convert to full or part time employment, subject to certain rules and restrictions.

The Commission's decision forms part of the four yearly modern award review and falls within the 'common issues' hearings – in this case, the review concerning common issues relating to casual and part time employment.

In reaching its decision, the five member full bench accepted the proposition advanced by the Australian Council of Trade Unions (ACTU) that "the unrestricted use of casual employment without the safeguard of a casual conversion clause may operate to undermine the fairness and relevance of the safety net".

Accordingly, the Commission has decided that a casual conversion clause should be inserted into all modern awards

However, the Commission did not go as far as to find that the clause should deem casual employees to have become permanent employees after an identified period.

Rather, the Commission has proposed a draft clause and sought further submissions from interested parties that allows casual employees to elect to convert to full or part time employment but only following a qualifying period of 12 months and subject to other rules and restrictions.

Further, the employer can refuse the conversion but only on the grounds that it would require a significant adjustment to the casual employee's hours of work to accommodate them in full time or part time employment, or 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, or on other reasonable grounds based on facts which are known or reasonably foreseeable.

The Commission's draft clause provides as follows:

(a) A qualifying period of 12 calendar months;

(b) A qualifying criterion that the casual employee has over the qualifying period worked a pattern of hours on an ongoing basis which, without significant adjustment, could continue to be formed in accordance with the full time or part time employment provisions of the relevant award;

(c) The employer must provide all casual employees (whether they become eligible for conversion or not) with a copy of the casual conversion clause within the first 12 months after their initial engagement; and

(d) A conversion may be refused on the grounds that it would require a significant adjustment to the casual employee's hours of work to accommodate them in full time or part time employment in accordance with the terms of the applicable modern award, or 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, or on other reasonable grounds based on facts which are known or reasonably foreseeable.

What employers should know

Employers will need to carefully consider how casual employees are engaged and in particular take note of a casual employee's right to elect to convert to full or part time employ subject to satisfying the relevant criteria –once the clauses are inserted into all modern awards.