If you are an employer, the recent decision of the Fair Work Commission (Commission) is likely to affect the way that you manage your staff.

The Commission’s decision – 4 yearly review of modern awards – Casual employment and Part-time employment [2017] FWCFC 3541 – will affect 85 modern awards and, under certain conditions, allow casual employees covered by those awards to request permanent employment after 12 months.

What is the “Casual Conversion Clause”?

In its decision, the Commission provides a model casual conversion clause to be included in each relevant modern award and sets out the criteria for assessing whether a casual employee is entitled to have their role converted to part-time or full-time. Employers will be required to provide their casual employees with a copy of the casual conversion clause within 12 months of engagement.

According to the Commission, a casual employee will be entitled to request a conversion if they have ‘… over a calendar year period of at least 12 months worked a pattern of hours which, without significant adjustment, the employee could continue to perform as a full-time employee or part-time employee [under the provisions of the relevant award]’.

Further, employers will be entitled to refuse the request on reasonable grounds provided that the employer’s reasons for refusal are communicated to the employee in writing within 21 days of the date of the request.

Refusing a request for conversion

According to the Commission, ‘reasonable grounds of refusal’ will include the following:

  • it would require a significant adjustment to the employee’s hours of work in order for the employee to be engaged in a part-time or full-time position under the relevant award;
  • it is known or reasonably foreseeable that the employee’s regular hours of work will cease in the next 12 months;
  • it is known or reasonably foreseeable that the employee’s regular hours of work will be significantly reduced in the next 12 months; or
  • it is known or reasonably foreseeable that in the next 12 months there will be a change in the days and/or times during which the employee regularly performs their hours of work which cannot be accommodated within the days and/or times which the employee is available to work.

In addition to the grounds listed above, the Commission noted in its decision that there may be other grounds that have not yet been contemplated, indicating that the model casual conversion clause could be subject to change in future.

If an employee disagrees with the reasons for refusal of their request, they will have to follow the dispute resolution procedures under the relevant modern award.

Accepting a request for conversion

Where an employer has accepted the employee’s request, they must record the new position in writing, including the form of employment (part-time or full-time) and any other matters that are required by the provisions of the relevant award. The employee will then commence the new position at the beginning of the next pay period following the date that the conversion is agreed upon.

Action items for employers

The Commission will receive further submissions from interested parties by 2 August 2017, after which the casual conversion clause is expected to be inserted into the 85 modern awards. Employers are therefore encouraged to watch this space carefully over the next few months and prepare to adapt their business operations to ensure that:

  • casual employees are made aware of their right to request a conversion;
  • requests for conversion are reviewed and responded to within the time limit; and
  • recruitment strategies take into account the prospect of casual conversion.

Pointon Partners have a wealth of experience in employment law, ranging from litigious matters to drafting and the review of employment contracts.

If you have any queries in relation to this article or employment law generally, please contact Michael Bishop on (03) 9614 7707.