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Casual Conversion to FT

3 minutes read time

On 5 July 2017 a full bench of the Fair Work Commission (FWC) as part of the extensive four-yearly review of modern awards made significant changes to the rights of casual employees across eighty-five Modern Awards by ruling that a casual conversion clause should be introduced to these Modern Awards.  This therefore gives longer term casual employees, rights to seek either full-time or part-time employment.

There are to be further submissions to the FWC in August 2017 concerning the wording of the clause but once resolved and orders finalised all Modern Awards will contain some form of casual conversion clause.

The FWC recommended changes to minimum engagement periods for casual workers in limited circumstances (such as in the Wine Industry Award in situations where weather conditions precluded work from being performed), and recommended allowing greater flexibility for rostering part-time work in the hospitality industry.

It was also foreshadowed that further review of the Social, Community, Home Care, and Disability Services Industry Award and the Aged Care Award may be required after the National Disability Insurance Scheme (NDIS) has been fully implemented, should the scheme be a catalyst for change in those industries affected by it.  It was held to be too early to gauge any changes in industry at this point in time.

However, the finding with the largest impact across the workforce is the ruling that Modern Awards should enable casual employees to elect to convert to full-time or part-time employment, subject to certain restrictions and qualifications.

The qualifications identified were that:

  • The employee must have completed at least 12 calendar months’ work with the employer;
  • The employee must have worked a pattern of hours on an ongoing basis which could continue to be performed in accordance with full-time or part-time employment without significant adjustment;
  • The employer must provide all casual employees with a copy of the casual conversion clause after they have been employed for a period of 12 months; and
  • A conversion may be refused by the employer on certain grounds.

The grounds upon which an employer could refuse a conversion were stated to be as follows:

  • A conversion 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 award terms; 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
  • There are other reasonable grounds based on facts which are known or reasonably foreseeable.

These changes apply to the 85 Modern Awards that do not currently have a casual conversion clause.  They do not affect Modern Awards where a casual conversion clause already exists.

What to Do

In the light of this directive, employers should take the following steps in relation to considering the terms of employment of casual staff:

  1. Determine whether the Modern Award or Awards applicable to staff now are subject to a casual conversion clause.
  2. Undertake an audit of casual staff to determine how many, if any, would qualify for casual conversion once the clause is introduced.
  3. Be aware of the requirement in due course to provide those casual employees who have been employed for a period greater than 12 months with a copy of the casual conversion clause from the relevant Modern Award.