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Casual conversion rights set to expand in Australia (again)

10 March 2021
The Australian Federal Government is proposing to further extend the right of casual employees to convert to full-time or part-time employment under the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2021.

Background

On 5 July 2017, the Fair Work Commission inserted a model casual conversion clause into most modern awards. The decision improved access to casual conversion for many employees, however it did not apply to all casual employees in the Federal jurisdiction. For example, certain modern awards do not have casual conversion clauses and the right does not extend to "award and agreement free" employees, or to those employed under an enterprise agreement which does not contain a casual conversion clause. 

Proposed provisions

Under the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2021 (the Bill), employers must make an offer of casual conversion if:

  • an employee has been employed for a period of 12 months; and
  • during at least the last six months of the 12 month period, that employee worked a regular pattern of hours on an ongoing basis, which without significant adjustment the employee could continue to work as a full-time or part-time employee. 

Offers of casual conversion must be given to employees within 21 days after the end of the 12 month period that they have been employed. They must be in writing, and must be an offer for employees to convert to one of the following:

  • full-time employment: for an employee that has worked the equivalent of full-time hours during the six month period; or
  • part-time employment: for an employee that has worked less than the equivalent of full-time hours during the six month period (part-time employment must be consistent with the regular pattern of hours worked during the six month period).

However, employers are not required to make an offer of casual conversion if there are reasonable grounds not to do so. In this situation, employers must give written notice to relevant casual employees that they are not intending to make an offer. The written notice must detail the employer's reasons for not making an offer. 

If offers of casual conversion are made, employees are required to give their employers a written response within 21 days (stating whether they accept or decline the offer). If an employee accepts an offer, employers are required to provide written notice to employees (within 21 days of the written acceptance) regarding:

  • whether they are converting to full-time employment, or part-time employment;
  • their hours of work after the conversion takes effect;
  • the day the conversion to full-time employment or part-time employment takes effect. 

However, before employers can provide a written notice detailing the points above, they must discuss these matters with employees, as well as any other matters they intend to specify in the written notice. 

There are also provisions that set out residual rights to request casual conversion which are available to casual employees (in certain circumstances). For example, these rights may be available to those who have not received an employer offer to convert.

Subject to certain exceptions, disputes about casual conversion can be dealt with by the Fair Work Commission, including by arbitration if the parties consent.

Conclusion

The extension of casual conversion will be welcomed by many, especially to those not covered by an enterprise agreement or award. However, employers should be aware of the regulatory requirements imposed by the Bill, especially in relation to:

  • making an offer;
  • the decision to not make an offer; and
  • what is required when an employee accepts an offer.

If you require further information or have any queries in relation to this legal update, please contact Mark Curran or Matthew Smith. 

Further Reading