The Fair Work Commission Full Bench has ruled in favour of inserting a ‘casual conversion’ clause into 85 of the 88 Modern Awards that do not already contain such a clause. What are the implications for employers?
WHY A CASUAL CONVERSION CLAUSE?
It is the view of the Fair Work Commission Full Bench that the Casual Conversion clause will address concerns relating to the permanency of employment - particularly casual employees who work regular or systematic part-time or full-time hours but remain casual employees.
WHEN DOES THE CASUAL CONVERSION CLAUSE TAKE EFFECT?
The Casual Conversion Clause is expected to take effect sometime after August 2017.
WHAT IS THE DRAFT MODEL CASUAL CONVERSION CLAUSE?
The draft model Casual Conversion Clause provides for casual employees who have been employed for a period of 12 months or more, to request their casual employment converts to permanent full-time or part-time. The employer may only reject a casual employee’s request on ‘reasonable grounds’ and after discussion with the employee. If the request is rejected, the employer must provide in writing to the employee its reasons within 21 days of the request being made. If the employee does not accept the employer’s decision, then the matter is to be managed under the dispute resolution procedure in the relevant Modern Award.
The reasonable grounds on which an employer may reject a casual conversion to permanent employment include (but are not limited to):
- the employee works strictly on an ad hoc basis and does not work regular or systematic hours
- the employer would have to make significant adjustments to the casual employee’s hours of work to accommodate them in full-time or part-time work
- it is known or reasonably foreseeable that the casual employee’s hours of work will significantly change or be reduced within the next 12 months
- it is known that the casual employee’s position will not exist in the reasonably foreseeable future.
Employers must also provide to their casual employees a copy of the Casual Conversion Clause within the first 12 months of their employment.
STEPS TO GET READY FOR CASUAL CONVERSION
Now is the time to start thinking about what steps you will take to manage your casual workforce. How will you manage your first employee’s request to convert from casual to permanent full-time or part-time employment?
- Analyse your workforce. How is it structured? Consider ways to ensure a part-time workforce provides the flexibility required to meet the needs of your business.
- Consider the option of guaranteeing a minimum number of hours for a part-time workforce with the flexibility to work additional hours as and when required. Ensure you consult with your employees about their availability and if they are flexible to work additional hours when required.
- Keep a watch by monitoring the hours that your casuals are working and how those casuals are rostered to work.
- Develop and implement a system that monitors and identifies regular and systematic casuals. Ensure the system alerts you before your casual employee celebrates their 12 month anniversary.
- Review and amend employment agreements, policies and procedures to ensure compliance once the decision comes into effect.
- Implement new employment agreements and notification procedures and processes to ensure compliance with legislation.
Thanks to the employment team at McCullough Robertson for helping us to get our heads around the implications of this decision.
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