Picture this… one of your casual employees has asked to see you tomorrow morning to discuss wanting to go permanent. They really caught your attention when they mentioned something about you ‘have to let them because they heard on the news last night that all casuals can now go permanent if they ask‘.
Given the sometimes complex and varied changes in our industrial relations systems in Australia, you can be forgiven for being on the backfoot with this question.
However, if this is the case, you really do need to read this article before you have that conversation.
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Back in July 2018, we wrote another article about the looming changes to award covered casual employees and their entitlements to convert to permanent employment. Since then, the Fair Work Commission (FWC) have heard further submissions and recently released their decision relating to the 4 yearly review of modern awards – Part-time employment and Casual employment.
What has changed?
As of 1st October 2018, the Model Clause governing casual conversion (and other provisions) has been amended and now includes:
- The 12-month eligibility period is now a ‘rolling period’, not a once-off measure. This means casuals can make a request at any time
- Casual employees will are required to have worked “equivalent full-time hours” over 12 months before seeking conversion to full time employment. This change is to allow for the fact that the employee may have taken periods of leave that could have reduced their average hours.
- For an employer’s grounds of refusal to be reasonable, they must be based on facts which are known or reasonably foreseeable. This means a ‘general uncertainty’ about future needs will not be acceptable or reasonable.
- The employer and casuals electing to seek part-time employment must agree in writing on the terms of employment – this has been standardised in the amended provisions.
- Casuals also have a standardised minimum shift payment of 2 hours for each time they are required to attend work….even with a break.
Note: the Model Clause still provides for an employer’s right of refusal but some care, operational facts and attention to the wording and overall process is needed.
What should you do?
1. Go straight to the award, do not pass go!
- Given that there are differences in some of the Model Clauses for various modern awards, employers should prioritise a re-read of the award that covers their casual employees and determine what they are now required to do. For instance, notify all new casual employees of their entitlements (using the prescribed process) or notify all existing casual employees by a certain date?
- Here is a link directly into the Fair Work Ombudsman website to help you determine which award governs your workplace….remembering there may be more than one!
- Once you’ve established what changes are required, you can now plan how to manage them.
2. Review your payroll system
- Make sure you’re payroll system can accommodate changes to pay rates or track length of service changes correctly. This will help when the time comes to change over an employee.
3. Review how you will capture start and notification dates
- If you are maintaining accurate employment records (see our shameless plug for our article HERE), then one of the key things you need to do is make sure there is a process to notify all parties when a casual is likely to hit their notification date or other requirements under the Model Clause. Remember, not doing this is now a breach of an award and comes packed with a load of penalties….the FWC will be looking to enforce this sooner rather than later have no doubts.
The good news
As much as this may come as a surprise to some, it is actually a great opportunity for employers to re-think how they engage their workforces.
- For example, converting employees might reduce labour costs; given that the higher rates and penalties assigned to casuals will be removed.
- It will also help strengthen a commitment between an employer and their employees…something casuals don’t have the luxury of in many cases.
- Finally, it is not an automatic right for a casual to convert their employment….but some planning is required by employers so as to avoid being unreasonable about how they use the humans in their business to meet future expected operational needs.
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