Recent changes to casual conversion clauses in modern awards: what employers need to know

A casual employee does not have a statutory right to elect to convert from casual to full-time or part-time employment – this right is determined by the applicable award or enterprise agreement.

Almost all modern awards create a right for casual employees to request to convert to permanent employment in certain circumstances. Enterprise agreements may also contain rights in relation to casual conversion.

From 1 October 2018, 85 modern awards which did not already contain a clause allowing casuals to request to convert to permanent employment were varied to insert a model casual conversion clause.

The 28 modern awards that already contained a casual conversion clause (e.g. the Manufacturing and Associated Industries and Occupations Award 2010) were not varied to replace the existing provisions with the model provision. These modern awards have alternative notification obligations for regular casual employees.

What does an employer need to be aware of regarding the model casual conversion clause?

The model conversion clause includes a requirement that:

An employer must provide a casual employee, whether a regular casual employee or not, with a copy of the provisions of this subclause within the first 12 months of the employee’s first engagement to perform work. In respect of casual employees already employed as at 1 October 2018, an employer must provide such employees with a copy of the provisions of this subclause by 1 January 2019.

Which casual employees can elect to convert to permanency?

A casual employee who has been engaged as a regular casual employee may request that their employment is converted to full-time or part-time employment.

A regular casual employee is a casual employee who has worked a pattern of hours on an ongoing basis in the preceding 12 months which, without significant adjustment, the employee could continue to perform as a full-time employee or part-time employee under the provisions of the award.

Any request from the employee must be in writing and provided to the employer.

Does an employer have to agree to a request from a casual employee to convert to permanent employment?

An employer is not required to agree to a request to convert to full-time or part-time employment. However, the request may only be refused on reasonable business grounds and after there has been consultation with the employee.

What are reasonable business grounds?

Without limiting what reasonable business grounds for refusal are, reasonable grounds could include that:

1. it would require a significant adjustment to the casual employee’s hours of work for the employee to be engaged as a full-time or part-time employee in accordance with the provisions of the award – that is, the casual employee is not truly a regular casual employee as defined above;
2. it is known or reasonably foreseeable that the regular casual employee’s position will cease to exist within the next 12 months;
3. it is known or reasonably foreseeable that there will be a significant change in the days and/or times at which the employee’s hours of work are required to be performed in the next 12 months which cannot be accommodated within the days and/or hours during which the employee is available to work.

For any ground of refusal to be reasonable, it must be based on facts which are known or reasonably foreseeable.

What does an employer have to do if they are going to refuse a request?

Where the employer refuses a regular casual employee’s request to convert, the employer must provide the casual employee with the employer’s reasons for refusal in writing within 21 days of the request being made.

The employee has an ability to dispute the refusal in accordance with the dispute resolution clause in the award. Under that procedure, the employee or the employer may refer the matter to the Fair Work Commission if the dispute cannot be resolved at the workplace level.

What does the employer have to do if they are going to accept a request?

Where it is agreed that a casual employee will have their employment converted to full-time or part-time employment, the employer and the employee must discuss and record in writing:

1. the form of employment to which the employee will convert – i.e. full-time or part-time employment; and
2. if it is agreed that the employee will become a part-time employee, the matters referred to in the part-time clause of the relevant award.

What happens to employment when an employee converts from casual employment to permanent employment?

The conversion to permanency will take effect from the start of the next pay cycle following such agreement being reached unless otherwise agreed.

Once a casual employee has converted to full-time or part-time employment, the employee may only revert to casual employment with the written agreement of the employer.

A casual employee must not be engaged or re-engaged or have their hours reduced or varied, to avoid any right or obligation under the award.

There is no obligation for a regular casual employee to convert to full-time or part-time employment or for an employer to require a regular casual employee to convert.