What might the new casual conversion provisions mean for business?

As part of the 4 yearly review of modern awards, the Fair Work Commission has decided to insert casual conversion provisions into the 85 modern awards that currently do not have provisions of this sort.

These provide a right for casual employees engaged on a regular and systematic basis to apply for conversion to full-time or part-time employment subject to a number of conditions as follows:

  • a qualifying period of 12 calendar months;
  • 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 performed in accordance with the full-time or part-time employment provisions of the relevant award;
  • 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
  • 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.

Please note that, at this point in time, awards have not been varied and the decision is therefore not operational.

Where this decision differs from  casual conversion provisions that are already in other modern awards is that:

  • the qualifying period is commonly 6 months rather than the 12 month period stated in the new decision
  • the relevant awards have a statement that an employer “must not unreasonably refuse” a request for conversion but there is no reference to the sorts of circumstances that might reasonably justify refusal (as set out in the new decision)
  • there are some variances in procedural requirements between the old and the new
  • existing casual conversion provisions continue to have force.

So what does it all mean?

Regardless of the industry you are in, every employer who has casual employees working regular and systematic hours over a prolonged period of time should review those arrangements and consider whether the past/existing working pattern and foreseeable future working pattern would justify conversion to full-time or part-time employment.

There is also a concern that, while an employee in a small business (less than 15 employees) is not eligible to make a claim of unfair dismissal until they have completed 12 months service (or 6 months in the case of larger businesses), there could be a spike in General Protection/Adverse Action claims where an employee exercises or intends to exercise their right to request casual conversion and perceives that they are disadvantaged because of that request or intention (eg in reduction of hours, variation of shifts to interrupt a regular working pattern or even discontinuation of employment). There is no qualifying period for these types of claims so employers beware.

The final point that we wish to make here is that security of employment is a significant issue in our community today and that is a key factor in attracting and retaining good people who’ll do a good job for you. If you want a great business, trust them and give them that security.