To be, or not to be: casual is the question

The landscape is about to change for long-term casual employees in Australia.  As part of its four-yearly review of Modern Awards, the Full Bench of the Fair Work Commission has decided that most Awards will need to include a ‘casual conversion clause’.  So, are Australian workplaces ready for this conversion experience?  Will this decision actually require much change for employers?  Should this introduction ask a third rhetorical question?  Read on.

Modern Awards set minimum standards for jobs across most industries in Australia.  They are regularly reviewed to ensure that they continue to provide a fair and relevant minimum safety net of working conditions.

A casual conversion clause will allow casual employees to convert to part-time or full-time permanency, in certain circumstances.  While some awards already contain such a clause, most don’t.

So, why should casual employees have the right to be converted to permanency when they already receive 25% higher pay?  Despite the casual loading, the Commission decided that Modern Awards still don’t provide enough of a safety net for long-term casuals.  The Commission was particularly moved by how uncertain casual employment can be, and the fact that it often lacks a defined career path.  ‘Casual’ status also tends to give an employee less access to training and development, and can inhibit an employee’s ability to obtain finance. 

All things considered, the Commission decided that casuals should be able to convert to permanent employment if, according to the proposed Model clause:

  • the employee has attained 12 months’ service with the employer; and

  • the employee has worked a pattern of hours that it could continue to perform on an ongoing basis in part-time or full-time employment; and

  • the conversion would not require a significant adjustment to the employee’s hours of work; and

  • it is reasonably foreseeable that the employee’s position will continue to exist for the next 12 months.

In its decision, the Commission was careful to note that employers have not historically abused casual employment, for the most part.  In saying that, it obviously felt it was necessary to change the status quo.

So what does this mean for businesses going forward? 

Well, nothing yet.  The Model clause is still up for debate and the Commission has invited submissions from interested parties. 

Once that gets locked down, employers will need to issue a notification form to all casual employees so that they know their rights.  Those forms will need to be sent out within the next 12 months, although the Commission will likely issue a standard form to make it a bit easier. 

We will post another article on our website once that form is issued, so stay tuned.  Other than that, if a business does not like the idea of its casual employees converting to permanent employment, it should treat those employees as casuals in the true (or common law) sense of the word.  Feel free to give us a call if you’d like to discuss the best ways to do so.

Authors: Ryan Murphy & Claire Limbach 

Leading Partner: Darren Gardner