The new casual conversion deadline under the Fair Work Act ("the Act") is 27 September 2021. Any employers who employ casual employees should ensure that they have properly and carefully considered whether the new casual conversion rules will apply to one or more of their employees.
In March 2021 the Act was amended to include a casual conversion entitlement for casual employees. This is now contained in the National Employment Standards of the Act. Further, for the first time, the Act included a definition of "casual employee".
Whilst the definition of "casual employee" is extensive and a person is a casual employee if certain criteria are satisfied, the definition includes a requirement that there is an offer of employment made on the basis that there is "no firm advance commitment to continuing and indefinite work according to an agreed pattern of work" and the person accepts the offer of employment on that basis.
When considering whether there is "no firm advance commitment to continuing and indefinite work according to an agreed pattern of work", regard must be had to a number of considerations. This includes whether the employer can elect to offer work and whether the person can elect to accept or reject work, the entitlement of the person to casual leave loading, whether there is a regular or systematic pattern of work etc.
Casual Conversion - Small Business Employers
The casual conversion process does not apply to small business employers. A small business employer is an employer that employs fewer than 14 or less employees. Casual employees are not counted unless they are regular casual employees. For the purpose of calculating the number of employees, associated entities are taken to be one entity.
The Casual Conversion Process
The Act introduced a requirement for employers to make an offer to casual employees to convert to full-time or part-time employment when the following conditions are satisfied:-
- the casual employee has been employed by the employer for 12 months;
- the casual employee has worked a regular pattern of hours on an ongoing basis for at least the last 6 months; and
- the casual employee could continue working these hours as a full-time or part-time employee without significant adjustment.
Employers must assess every casual employees within 21 days of the end of their 12 months of employment and either:-
- make an offer of casual conversion; or
- provide written reasons for the refusal to make the offer of casual conversion.
Reasons to refuse to offer casual conversion may include the casual employee not satisfying the conditions for casual conversion, or on other "reasonable grounds".
Reasonable grounds may include business operational requirements, however, such grounds must not be based on speculation or some general lack of certainty about the employee’s future employment. The casual conversion provisions of the Act provide some examples of “reasonable grounds”. This may include for example the position of employment ceasing to exist, or the employee's required hours of work being significantly reduced.
The Act also introduced a right for casual employees to request to convert to full-time or part-time employment. Casual employees can also request to become a full-time or a part-time employee provided that the request is not completed by the employee within 6 months after:-
- the employee has refused an offer of casual conversion from the employer;
- the employer has given the employee notice that casual conversion will not be offered on reasonable grounds; or
- the employer has refused a request for casual conversion by the employee.
The Transitional Arrangements
The transitional arrangement is in place until 27 September 2021. This applies to casual employees who were employed prior to 27 March 2021.
The transitional arrangements require employers to conduct assessments for these existing casual employees and whenever a casual employee satisfies the conditions set out above, employers will be required to make the employee an offer of casual conversion in writing within 21 days of the date of the assessment (but no later than 27 September 2021). This is subject to the employer providing written reasons for the refusal to make the offer of casual conversion on reasonable grounds having regards to business operation requirements etc.
What if the Casual Conversion is accepted by the Employee?
If a casual employee satisfies the conditions and accepts an offer to convert to full-time or part-time, the employer must discuss the new terms of employment with the employee. This will include the employee’s hours of work after the conversion takes effect and the day the employee’s conversion will take effect.
The conversion takes effect from the first day of the employee’s first full pay period after the day the notice is given, unless otherwise agreed between the employer and employee.
The Fair Work Commission is in the process of reviewing all modern awards to ensure that the casual conversion provisions of the modern awards are consistent with the Act.
Casual Information Statement
In addition to the Fair Work Information Statement required to be provided to all employees at the commencement of employment, all new casual employees must also receive a Casual Employment Information Statement.