Casual Terms Award Review 2021: What are the Casual Conversion Rules for Employers?
The Fair Work Commission (Commission) has officially completed its Casual Terms Review (the Review) following amendments to the Fair Work Act 2009 (Cth) (the Act) on 27 March 2021. Schedule 1 of the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 (Cth) (the Amending Act) introduced a new definition for ‘casual employee’ under s 15A of and casual conversion under Division 4A of Part 2-2 of the Act.
The Amending Act also required the Commission to conduct the Review, to consider what variations of modern awards were necessary to “remove inconsistencies, difficulties or uncertainties”, as a result of the Amending Act. The Commission set out to achieve this in 6 months, and on 27 September 2021 the Review was completed, with a total of 151 awards (out of 155) being varied to be consistent with the Amending Act.
What does this mean for employers?
The Amending Act clarifies the definition of what characterises casual employment, sets requirements offering casual employees conversion to permanent employment, and also clarifies how any claims for entitlements are to be managed thereafter. For employers with more than 15 employees, they must offer casual conversion to casual employees. This article will explore some of the new casual conversion requirements employers must now fulfil.
What are the eligibility requirements for an employee to request conversion?
To be eligible to request casual conversion, a casual employee:
- needs to have been employed by the employer for at least 12 months;
- needs to have worked a regular pattern of hours on an ongoing basis for at least the last six months; and
- could continue working these hours as a full-time or part-time employee without significant changes.
What are employers required to do to comply with the new casual conversion requirement?
If an employee is eligible for casual conversion, employers (except small business employers) are required to provide a written offer to convert a casual employee to permanent employment (full-time or part-time) within 21 days after the casual employee’s 12-month anniversary.
Can an employer reasonably refuse to offer casual conversion?
If an employer decides not to offer casual conversion, the employer must write to the eligible employee within 21 days of the 12-month anniversary of their employment stating:
- that they will not be making the casual employee an offer to convert to permanent employment; and
- the reasons for this decision. The only acceptable reasons for not making an offer are that:
- the employee hasn’t worked a regular pattern of hours on an ongoing basis for at least 6 months which they could continue working as a permanent employee without significant changes; or
- the business has reasonable grounds for not making an offer which may only include:
- that the employee’s position won’t exist, or their working hours will change significantly; or
- making the offer would not comply with a recruitment or selection process required by or under federal or state law; or
- the employer would have to significantly adjust the employee’s hours for them to be employed full-time or part-time.
Can employees request to convert?
Yes, if they are eligible, employees may now make a request to convert from 21 days after their 12 month employment anniversary if their employer entity has more than 15 employees. If an employee works for a small business with less than 15 employees, casual employees may request to convert to full time or part time employment any time after their 12 month work anniversary. The request has to be in writing and be for:
- full time employment, if the hours worked by the employee for the last 6 months equate to full-time hours; or
- part time employment, if the hours worked by the employee for the last 6 months have been less than full-time hours.
Are employers obligated to respond to requests?
Yes, employers must respond to any request for casual conversion within 21 days of the request being made, advising whether the request has been accepted or not. If the employer refuses, the employer must provide a written response in writing to the employee containing the reasonable grounds for refusal. Please note that employers cannot refuse a request before discussing the request with the employee and they must have reasonable grounds for refusing, stated above.
When is an employee not eligible?
An employee may not be eligible to request casual conversion is they have refused an offer from their employer to convert in the last 6 months or their employer has written to them stating that an offer will not be made and there are reasonable grounds for not making the offer. Casual employees may request to convert to permanency every 6 months, if they are eligible.
Acceptance of request or offer
Once a request or offer to convert has been accepted, the employer must advise their employee of the new working hours, whether the employment is full-time or part time, and the start date of the employee’s permanent employment.
If an employer’s offer to convert has been accepted by an employee, the employer is required to write to the employee confirming acceptance within 21 days after the employee has accepted the offer.
If an casual employee’s request has been accepted by an employer, the employer is required to write to the employee confirming acceptance within 21 days after the employee has made the request.
The procedural requirements, for both casual employees and employers, with regards to casual conversion arrangements are quite technical. If you require assistance with casual conversion arrangements concerning an existing employee, please do not hesitate to contact Nick Stevens, Luke Maroney, and Daphne Klianis.
