10 Oct Casual conversion clauses in Awards apply from 1 October 2018

On 1 October 2018 new Casual Conversion clauses became effective in 84 Modern Awards (i.e. in most Awards). What does this mean? If your business employs casual employees (who are covered by one of these Awards) those employees now have the right to request conversion to permanent employment if they have been employed with your business for more than 12 months.

Your obligations
Casual employees must be given a copy of the new clause in the Award within the first 12 months of their employment. Or if they were employed with your business as at 1 October 2018, those employees must be given a copy of the clause by 1 January 2019.

If a casual employee makes a request to convert to full-time or part-time employment, that request may only be refused on reasonable grounds and after there has been consultation with the employee.

Refusing a request for conversion
Refusing a request for conversion to permanent employment needs to be in writing and you can only make that refusal on the following grounds (as outlined in the Awards that now incorporate these new clauses):

• It would require a significant adjustment to the casual employee’s hours of work in order for the employee to be engaged as a full-time or part-time employee.

You could justify this when the casual employee’s hours have clearly been irregular and unpredictable (rather than regular and systematic). If an employee has been working for long periods on the same work roster week-in and week-out, it will be hard to argue that these hours could not continue on a permanent basis.

• It is known or reasonably foreseeable that the regular casual employee’s position will cease to exist within the next 12 months.

This might be due to a downturn in business, where you have a need to reduce staffing. But it would not be wise to employ a permanent employee and then use that as justification for no longer needing the casual position. The obvious question will be, why wasn’t the permanent position offered to the casual employee?

• It is known or reasonably foreseeable that the hours of work which the regular casual employee is required to perform will be significantly reduced in the next 12 months.

Again, you might use an anticipated downturn in business to make that justification.

• 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.

This might occur where the opening hours of your practice are extended and the casual employee is not able to work the hours needed to cover the extended opening hours.  

The bottom line is, if you intend to refuse a request to convert a casual employee to permanent employment, you need to:

1. show that you have genuinely consulted with the relevant employee about their request (and basically taken the request seriously);
2. have a good reason for refusing the request; and
3. notify the employee of the refusal in writing.

Of course, if a casual employee converts to permanent employment, their rate of pay will reduce as they will no longer be entitled to the 25% casual loading they receive. As such, many employees may prefer for their employment to remain casual. However, where this is the case, it would be wise to keep a written record of the employee’s desire to remain casual.