Changes to casual employment – conversion of eligible casual employees to full time or part time employment

Employers will recall that the Fair Work Act 2009 (Cth.) was varied on 27 March this year to enable eligible casual employees with 12 months service to seek conversion to permanent employment.

Eligible casual employees are those with more than 12 months service working a regular pattern of hours on an ongoing basis without significant adjustment over a six month period from 27 March 2021.

Employers should therefore be mindful of their obligations in relation to eligible casuals employees and assess whether these casual employees should be offered or not offered permanent employment from 27 September 2021 as outlined below.

• Make an offer of conversion

An employer of an eligible casual employee who works on a regular and systematic basis must be offered conversion to full time or part time employment as the case may be, depending on whether equivalent full time or part time hours have been worked. The offer of conversion must be in writing, and made within 21 days of the end of the 12 month period of casual employment. This provision also applies to award/agreement free employees.

The employee is required to provide a written response to the offer within 21 days after the offer is provided, and advise whether the offer is accepted or declined. A failure of the employee to provide a written response is deemed to be a decline of the offer of conversion.

• Not required to make offer of conversion

The employer is not required to make an offer where there are reasonable grounds based on known facts, or were reasonably foreseeable at the time. However, the employer must advise the employee that an offer of conversion will not be made. Reasonable grounds in deciding not to make an offer include the following:

(a)  the employee’s position will cease to exist in the period of 12 months after the time of deciding not to make the offer;

(b)  the hours of work which the employee is  required to perform will be significantly reduced in that period;

(c)  there will be a significant change in either or both of the following in that period:

1. the days on which the employee’s hours of work are required to be performed;
2. the times at which the employee’s hours of work are required to be performed; which cannot be accommodated within the days or times the employee is available to work during that period;

(d)  making the offer would not comply with a recruitment or selection process required by or under a law of the Commonwealth or a State or a Territory.

The employer must give written notice to a casual employee within 21 days at the end of the 12 months of employment advising if the employer has decided not to make an offer of conversion, and the reasons for not making an offer of conversion.  In addition, an employer must give notice to a casual employee who has been employed for more than a 12 month period and who does not meet the definition of an eligible casual employee, that an offer of conversion will not be made.

• No action is taken

If an employer fails to offer conversion to an eligible casual employee, or fails to give notice to an eligible casual employee that they will not be offered conversion, or fails to respond to an eligible casual employee’s request for conversion within the required timeframe, the employee has a residual right to request conversion to full time or part time employment as the case may be.

An eligible casual employee also has a right to request conversion from casual employment to full time or part time employment based on the hours worked. The request must be in writing and provided to the employer.

The employer must provide a written response to the request within 21 days after the request is provided to the employer, advising whether the request is accepted or refused.  The employer must not refuse the request unless the employer has consulted with the employee. Further, there must be reasonable grounds to refuse the request, and the reasonable grounds are based on facts that are known, or reasonably foreseeable, at the time of refusing the request. Reasonable grounds of refusal are similar to those outlined above where an employer refuses to offer casual conversion.

A small business employer (employing less than 15 employees) is not required to offer an eligible casual employee conversion to full time or part time employment based on the hours worked. However, an eligible casual employee may request conversion to full time or part time employment (as the case may be) after 12 months of employment. Small business employers are also required to consult with the employee and respond to an employee request of conversion in writing within 21 days, outlining reasonable grounds for refusal as outlined above.

The right of an eligible casual employee to request conversion to full time or part time employment is a workplace right. Therefore, reducing or changing an employee’s hours of work or roster or terminating employment to avoid offering or accepting casual conversion places an employer at risk of an adverse action claim.

Employers should review the hours worked by casual employees and establish processes to ensure compliance with these provisions of the Act. Employers should also review their casual arrangements and practices, such as terms in contracts of employment, and payment of casual loadings.

If employers are unsure about their obligations they should seek advice.

Mapien can assist with questions of compliance to meet the requirements of the Fair Work Act, and can also assist with formal advice and responses to casual employees as required. Please contact us at hello@mapien.com.au and a Mapien Workplace Strategist will be in contact within 24 hours.