Changes to Modern Awards – Expanding the Casual Conversion Clause

On July 5, the Fair Work Commission delivered a landmark decision as part of its four-yearly review of Modern Awards which will allow casuals to convert to permanent full time or part time work after being employed for 12 months.
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These provisions are not completely new – they have been evident within some awards such as those within the Building and Construction industries for some time.  However, the decision to include a casual conversion clause will impact an additional 85 modern awards with commentators suggesting that the retail and hospitality sectors will be most affected.

But what does this all really mean?

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​The Proposed Change
The Commission determined that if a casual staff member’s employment can be deemed as systematic and ongoing, then it is ‘fair and necessary’ to allow those casual employees the same entitlements of permanent employees.    Under the proposed new clause, a casual employee will be able to convert to permanent if:

1. the casual employee has been employed for 12 calendar months; and
2. the employee 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.

All casual employees will need to be provided with a copy of the relevant casual conversion clause within the first 12 months of their casual employment.

Refusal of a Casual Conversion Request
An employer can refuse a casual employee’s application to convert if:

• it would require a significant adjustment to employee's hours of work; or 
• it is known or reasonably foreseeable that the casual employee's position will cease to exist; or
• the casual employee's hours of work will significantly change or be reduced within the next 12 months; or
• on other reasonable grounds based on facts which are known or reasonably foreseeable.

Consultation with the employee should occur in the event of refusal and should be communicated in writing.  There is still the option for the employee to instigate the award’s dispute resolution procedure if they do not accept the grounds for refusal.

What should businesses do now?
These changes are yet to come into effect with the Commission taking further submissions regarding the draft model.  The changes are likely to be implemented in the coming months in which case, Deb Peppard of HR Staff n’Stuff makes the following recommendations:

• Businesses should review the way they manage and roster casual employees to be able to successfully continue to keep a casual workforce component.  Ensure you roster your casuals in an irregular and ad hoc fashion in order to truly meet the definition of casual employment. 
  
• Remember that permanent employees can potentially offer you more commitment and productivity due to having better job security. 
  
• Think about the makeup of your employees and decide what is the best way for your business to operate, and then ensure the employee mix meets your needs properly.
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As with any change to the Modern Awards, there can be a lot to consider in terms of your business planning and the way you may approach employment of new team members moving forward.  Ensuring you are across the changes and their implications will safeguard you from decisions that may have a detrimental effect to the composition of your workforce.

If you have any questions about casual employees  or modern awards, please contact the team at HR Staff n’Stuff via email or phone 9590 0844.

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