Commission proposes casual conversion in 85 modern awards

On 5 July 2017, the Fair Work Commission (Commission) handed down its long-awaited decision on casual and part-time employment as part of its four yearly review of modern awards. In its decision, the Commission considered submissions by the Australian Council of Trade Unions who sought the introduction of a model casual conversion clause into 88 modern awards, which did not already contain such a provision.

The right of long-term casuals to convert their employment to permanent is not new, with most manufacturing awards having contained a similar provision for a number of years.  In its decision, the Commission determined that it was necessary to extend this right to 85 modern awards, subject to certain criteria and restrictions, to meet the modern awards objective.

Model Casual Conversion Clause

In order to give effect to its conclusion, the Commission drafted a model casual conversion clause.  The model clause has a qualifying period of 12 calendar months and a qualifying criterion that the casual employee has worked, over the qualifying period, a pattern of hours on an ongoing basis that the employee could continue to perform in a part-time or full-time capacity.

The clause allows employers to refuse conversion on the grounds that:

  1. it would require a significant adjustment to the casual employee’s hours of work to accommodate them in full-time or part-time employment;
  2. it is known or reasonably foreseeable that the casual employee’s position will cease to exist, or the employee’s hours of work will significantly change or be reduced within the next 12 months; or
  3. on other reasonable grounds based on facts which are known or reasonably foreseeable.

Where the employer refuses a casual employee’s request to convert, the employer must provide the casual employee with reasons for refusal in writing within 21 days.

The model clause also requires that employers provide all casual employees (whether they become eligible for conversion or not) with a copy of the casual conversion clause within the first 12 months after their initial engagement.  The rationale behind this is to remove the most burdensome aspect of the notification process, namely identifying those casuals who would be eligible for conversion.

Implications

It is important to be aware that this is only a draft ruling, so it is not law yet.  The Commission has invited interested parties to make further submissions on or before 2 August 2017.

Nevertheless, employers should be aware of the decision, consider how it affects their business, and reflect on how they will comply when the final model conversion clause comes into force.

Please contact a member of Lynch Meyer’s Workplace Relations team if you would like more information on how this decision may affect your business.