Throughout 2017 Fair Work undertook its 4 yearly review into Modern Awards, one of the major changes implemented which will affect 80+ Awards was the changes made to a casual employees right to request conversion to permanent employment. A full list of affected Awards can be found here.
These changes only affect business operating under the Federal system of employment, if you are a Sole Trader eg: Jane Smith T/as Janes Cafe, an unincorporated partnership eg: Jane & Bob Smith T/as Janes Cafe or an unincorporated trust eg: Jane and Bob Smith as trustee for Janes Cafe you fall under the WA Industrial Relations Commission. The majority of employees in Australia fall under the Federal system which covers all constitutional corporations or in layman’s terms it is any business with “Ltd” or “Pty Ltd” after its name. All other states in Australia have referred their industrial relations powers to the Federal system but Western Australia being Western Australia has chosen to keep the State based system.
The clause which became effective on 1 October 2018 provides eligible casual employees with the right to request that their employment is converted to full-time or part-time employment (Conversion Request). This is not a strict right to convert to permanent employment. However, an employer’s grounds for refusing the request are limited and can be subject to challenge (see below).
Casuals will be eligible to make a Conversion Request if, in the preceding 12 months, the casual employee has worked a pattern of hours on an ongoing basis that, without significant adjustment, the casual employee could continue to perform as a full-time or part-time employee.
If an eligible casual makes a Conversion Request, and the employer agrees to the request, the employee converts to permanent employment. In WA the Long Service Leave Act recognises periods of casual service towards “Years of Service” as does Federal legislation for the entitlement for Parental Leave and Unfair Dismissal applications if the following clauses are satisfied;
- the casual employee was employed on a regular and systematic basis, and
- the casual employee had a reasonable expectation of ongoing employment on a regular and systematic basis.
Employers can refuse a Conversion Request, however, such refusal must only occur:
- after the employer has consulted with the employee
- on the basis of ‘reasonable grounds’. A non-exhaustive list of reasonable grounds for refusal are set out in the model term, and include circumstances where conversion to permanent employment would require a significant adjustment of the employee’s hours of work or where it is known or foreseeable that in the next 12 months there will be changes to the hours of work, days and/ or times an employee works or where the employee’s position will cease to exist in 12 months.
Employers must provide the employee with the employer’s reasons for refusal in writing and within 21 days of the request being made.
Employers should be aware that if an employee disagrees with the decision to refuse the request, the employee may make an application for the dispute to be heard by the FWC.
Employers must notify casual employees of their right to request to convert by providing a copy of the applicable casual conversion clause to all casual employees (not just regular casuals employees) covered by a modern award containing the model casual conversion clause:
- by 1 January 2019, if the employee is already employed as at 1 October 2018; or
- within the first 12 months of the employee’s first engagement to perform work, if the employee is first engaged any time after 1 October 2018.
I recommend employers with casuals ensure sufficient procedures are in place to monitor employees anniversary dates and comprehensive records are kept on file in relation to any communication in regards to casual conversion. Additionally employers should review & monitor rosters and hours of work of long terms casuals to determine if they are still in fact casuals as determined by the applicable Award. A recent Full Court of the Federal Court decision found that a ‘fly-in, fly-out’ worker was not a casual employee despite being employed as one. Accordingly, the employee was entitled to annual leave; a benefit not otherwise available to casuals.