Legal development

Countdown to casual conversion

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    What you need to know

    • The National Employment Standards now include a casual conversion entitlement.
    • The entitlement is two-fold, and includes: (i) a requirement that employers (other than small business employers) make offers to certain casual employees to convert to full or part time employment; and (ii) a residual right for casual employees to request to convert to full or part time employment.

    What you need to do

    • Identify all casual employees who began employment before 27 March 2021, and assess whether they will be eligible for casual conversion by 27 September 2021.
    • If any casual employees meet the eligibility criteria, offer to convert their employment to full time or part time (unless there are reasonable grounds for not making an offer). If no offer is made, a reason must be provided to the employee in writing.
    • On an ongoing basis, take steps to ensure employees are assessed for casual conversion within 21 days of their first anniversary date.
    • Consider how casual conversion entitlements under any applicable enterprise agreement or modern award may interact with the casual conversion entitlement under the NES.

    New laws affecting casuals

    On 27 March 2021, important amendments to the Fair Work Act 2009 (Cth) impacting casual employment arrangements took effect. The key changes for employers are:
    • a new, statutory definition of "casual employee";
    • an entitlement for casual employees to convert to full or part time employment; and
    • a requirement that employers provide the new Casual Employment Information Statement to all casual employees upon commencement of employment (and to existing casual employees as soon as practicable after 27 September 2021).

    The focus of this article is the new casual conversion entitlement.

    Casual conversion under the NES

    As of 27 March 2021, there is a positive obligation on employers to assess whether casual employees who have worked for the employer for 12 months meet the eligibility criteria for casual conversion. An employee will be eligible for casual conversion where the employee:

    • has worked for their employer for 12 months;
    • has worked a regular pattern of hours for at least the last six of those months on an ongoing basis; and
    • could continue working those hours as a permanent employee without significant adjustment.

    As the casual conversion process has been included in the NES, it overrides existing casual conversion processes available under enterprise agreements and modern awards (to the extent those provisions contain less beneficial terms).

    Employers subject to dual conversion requirements need to consider how to comply with both the new casual conversion process under the NES and an existing process under an enterprise agreement or modern award. (There is also a process occurring through the FWC to vary modern awards as necessary and a mechanism for varying an enterprise agreement on application.)

    When to assess an employee for conversion

    A six month transition period applies during which employers must assess existing casual employees who have been employed for 12 months for casual conversion. The transition period ends on 27 September 2021.

    After the transition period ends, employers must make the assessment within 21 days after the first anniversary date of the employee's employment and provide a written notice to the employee either:

    • offering the employee permanent full or part time employment consistent with the employee's regular pattern of hours over the previous six months; or
    • advising the employee that the employer will not be making an offer (including the reason for not making an offer).

    The reason for an employer not to make an offer may be either:

    • because the employee has not worked a regular pattern of hours for at least the last six months which the employee could continue to work as a permanent full time or part time employee; or
    • because there are reasonable grounds not to make an offer (such as because the employer knows, or reasonably foresees, that the position will cease to exist within the next 12 months or that the hours of work will be significantly changed or reduced during that period).

    Casual employees who receive an offer must either accept or decline the offer, in writing, within 21 days of receiving it (or the offer is assumed to be declined).

    What employers must do by 27 September 2021

    Employers have less than three months remaining to:

    • assess each casual employee who has been employed for at least 12 months for eligibility for casual conversion; and
    • write to each casual employee, either offering conversion to full time or part time employment or explaining the reason for not making an offer, within 21 days of assessing that employee's eligibility.

    Residual right of employees to request casual conversion at six monthly intervals

    The NES also includes a residual right for casual employees to request to convert to permanent employment, similar to existing rights to request casual conversion under some modern awards.

    Assuming a casual employee meets the eligibility criteria for casual conversion, the employee may submit a request for casual conversion to their employer at six monthly intervals. The employer must accept or refuse the request in writing within 21 days and, if refused, consult with the employee prior and provide reasons.

    FWC can resolve disputes regarding casual conversion

    Award and agreement covered employees can utilise the dispute resolution procedure under the applicable instrument to refer a dispute regarding casual conversion to the FWC.

    Award/agreement free employees may also refer a dispute to the FWC which may deal with the dispute and, with the parties' agreement only, arbitrate the dispute.

    Authors: Abigail Cooper, Counsel and Fergus Calwell, Lawyer.

    The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
    Readers should take legal advice before applying it to specific issues or transactions.


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