Tuesday, 18 September 2018

Casual Conversion Starts from 1 October 2018

The Fair Work Commission has now confirmed that the introduction of casual conversion clauses in modern awards that do not already have one will occur from 1 October 2018. Find out more about these changes below.

After what period of employment will an employee be eligible for conversion?

A casual employee will be able to request to convert to full-time or part-time employment if the casual employee has been regularly employed for the previous 12 calendar months. Awards that already contain a casual conversion clause may have a shorter conversion period (such as 6 months).

This is not a “one off” event – the 12 month qualification period to be eligible to make a casual conversion request is a rolling period which can be exercised at any time by the employee.

What category of casual employees will be eligible for conversion?

“Regular” casual employees will have the right to request conversion. A “regular” casual employee is an employee who has 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 provisions of the relevant award.

If the employee has worked equivalent full time hours over the previous 12 months, they can request to have their employment converted to full time employment. If the employee has worked less than equivalent full time hours over the previous 12 months, they can request to have their employment converted to part time employment and their hours of work will be consistent with the hours they previously worked.

Is the employer required to notify casual employees of their rights under the casual conversion clauses?

Employers are required to make casual employees aware of their rights to request conversion.

To this end, employers must provide all new casual employees (whether they are eligible or not) with a copy of the relevant casual conversion clause within the first 12 months after they commence casual employment. There is some flexibility as to compliance with this requirement – employers can for example provide any new employee with a copy of the clause as a matter of course or they can wait until a later time in the first 12 months so that they only need to give it to casual who have worked in the business for a considerable amount of time.

For casual employees already employed as at 1 October 2018, they must be provided with the relevant casual conversion clause by 1 January 2019.

Is the right to convert absolute or are there grounds upon which an employer can refuse the conversion?

Accepting Casual Conversion Requests

The casual employee’s request to become full-time or part-time must be made in writing. Under the new rules, if it is agreed that the casual employee will have their employment converted to full-time or part-time employment, the employer and employee must discuss and record in writing:

  • whether the employee will be full-time or part-time; and
  • if the employee will be part-time, the number of hours and roster they will work and other matters to be agreed upon as set out in the relevant award.

The casual conversion clause does not however require an employer to increase an employee’s hours as a result of a conversion.

Once agreed, the conversion will take effect from the start of the next pay cycle, unless it is agreed otherwise.

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

Refusing Casual Conversion Requests

It is important to note that the new casual conversion rules give casual employees the right to request to become full-time or part-time. Conversion to full-time or part-time employment is not automatic.

Employers will be able to refuse a request for casual conversion on reasonable grounds and only after there has been consultation with the employee.

Grounds for refusal include that:

  • it would require a significant adjustment to the casual employee’s hours of work to accommodate them in a full-time or part-time position; or
  • it is known or reasonably foreseeable that within the next 12 months:
    • the casual employee’s position will cease to exist;
    • the casual employee’s hours of work will significantly change or be reduced;
    • there will be a significant change in the days or times that the casual employee is required to work which cannot be accommodated within the days that the employee is available to work; or
  • On other reasonable grounds based on facts which are known or reasonably foreseeable.

The reasons for refusal must be communicated in writing to the employee within 21 days of the request being made. Some care should be taken to ensure that requests are considered on their merits as if an employee does not accept the reasons for the refusal they can use the award’s dispute resolution procedure or refer the matter to the FWC.

Employers are also unable to terminate, reduce or vary a casual employee’s hours in order to avoid the causal employee’s right to request to become full-time or part-time.

Other changes

In addition to the casual conversion clause, the FWC confirmed that there will be several amendments to specific modern awards from 1 October 2018, including:

  • 2 hour daily minimum engagement period for casual employees into the 34 modern awards that currently do not have any minimum engagement period, including the Banking, Finance and Insurance Award 2010 and the Vehicle Manufacturing, Repair, Services and Retail Award 2010;
  • 4 hour minimum “floor” engagement in certain manufacturing awards, including the Food, Beverage and Tobacco Manufacturing Award 2010 and the Manufacturing and Associated Industries and Occupations Award 2010, unless the employee requests for a minimum of 3 hours; and
  • Clarification that rostering arrangements and changes may be communicated to employees by any electronic means or communication in certain social care and aged care awards, including the Social, Community, Home Care and Disability Services Industry Award 2010.

How will the changes impact enterprise agreements?

These changes apply only to certain modern awards. Any existing registered enterprise agreements will generally not be affected. However, if the enterprise agreement states that it incorporates the provisions of a modern award, the relevant casual conversion clause will also apply to employees covered by the enterprise agreement.

These changes will also have an impact on employers who wish to negotiate a new enterprise agreement as this will be a relevant consideration by the FWC when applying the “Better Off Overall Test” to ensure that employees are better off overall under the agreement compared to the relevant award.

What happens next?

As these changes come into effect on 1 October 2018, employers should start preparing for the potential impact of casual conversion and consider reviewing the composition of your workplace as there can be no doubt that these changes will have a significant impact on all businesses.

This article was produced by HR Legal. It is intended to provide general information only in summary format on legal issues. It does not constitute legal advice, and should not be relied on as such.

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