Do you have casual staff who have been working with you regularly and for a lengthy period of time?
Does a Modern Award apply to their employment?
If so, do you have obligations to offer to change their employment to a more permanent status?
A recent decision of the Fair Work Commission has inserted a new provision into 84 Modern Awards relating to casual conversion. This came into effect on 1 October 2018.
The new Modern Award amendments require employers to inform casual employees, that they may have a right to request transition from casual employment, to full-time or part-time employment.
The new standard Modern Award clause defines a “regular casual employee”, and one who can request conversion, as one who in the preceding 12 months worked a pattern of hours on an ongoing basis which, without significant adjustment, they could continue to perform as a full-time employee or part-time employee, under the provisions of that Modern Award.
Employers are required to provide a copy of the provision to casual employees:
- within the first 12 months of their engagement; or
- in relation to existing casual employees, by 1 January 2019.
In the relevant circumstances, an employee may choose to apply to the employer to convert to permanent employment.
The employer can however refuse such an application, “on reasonable grounds” and after there has been consultation with the employee.
These reasonable grounds are set out in the clause, and include, for example, it being known or reasonably foreseeable that the regular casual position won’t exist within the next 12 months.
If an employer refuses the conversion request, it must provide the employee with reasons for doing so in writing within 21 days of the request being made.
Even then, if an employee doesn’t accept this refusal, they may ultimately be in a position to refer to the matter to the Fair Work Commission for determination.
Clearly, this new Modern Award clause will present a challenge to many employers.
It will also no doubt bring into question the amenity of engaging casual employees on a long-term basis, noting also that:
- the recent decision of a Full Court of the Federal Court of Australia in the matter of Skene, determined that long term casual employees may be entitled to paid annual leave (and potentially other benefits normally only available to permanent employees); and
- such employees may also have an entitlement to bring a statutory unfair dismissal claim against their employer if their employment is terminated.
It is therefore recommended that employers carefully consider their current and intended arrangements. They should then determine:
- whether they have an obligation to notify employees of the Modern Award provisions referred to above; and
- moving forward, as to whether they should only engage employees who might otherwise be considered “casual”, on a short term, irregular basis.The latter point in particular, may be a difficult one to reconcile and implement, depending upon the nature of the employer’s business. Careful consideration of the arrangements in place would need to be made, and it is recommended that appropriate advice should be sought.
If you need any assistance in this area, please do not hesitate to contact Clayton Payne.
This information is intended to provide a general summary only and should not be relied on as a substitute for legal advice.