***** Important Note*****
As at 1st October 2018, the Fair Work Commission have approved the Model Clause relating to casual conversion rights and obligations for award-covered employees. These changes take affect across the remaining industries not already covered by these provisions. Read our updated article HERE.
For those of us who love staying on top of the latest HR news, it has been hard to miss the major changes that the Fair Work Commission announced following their 4-year review of modern awards last year.
In their full decision, they address many aspects of part-time and casual employment in Australia. A key point of interest to anyone who employs casual staff is their decision to afford casual employees the right to conversion to full-time or part-time employment in certain circumstances.
This is not a new concept – it’s already in place in some modern awards. However, the FWC has acknowledged the need to introduce this to the remaining modern awards under the Fair Work system.
Note: given how the Fair Work Ombudsman has recently focused on ensuring businesses comply with the vulnerable workers legislation changes, we expect a similar focus to occur around casual conversion entitlements in the coming months. As ever in HR, being informed means you can plan.
The draft clause governing this entitlement currently outlines:
- To be eligible, casual staff must have regularly worked a pattern of hours over a 12 month period. This means regularly worked shifts not simply 2 days one week, 4 days the next, then nothing for a week and so on and so on….however, chances are many businesses’ ‘regular casuals’ will be eligible.
- Casual staff may request in writing to convert their employment to full-time or part-time employment
- Employers must provide all casual staff with the casual conversion clause within 12 months of their engagement – this means you have to tell your casual staff of their entitlements to request conversion
Employers must consider each request and can only refuse on reasonable grounds and after consultation with the employee
What are reasonable grounds to refuse a casual conversion request? This includes:
- where the conversion would require a significant adjustment to the casual employee’s hours of work
- where it is known or reasonably foreseeable that the employee’s position will cease
- where their hours of work will be significantly reduced in the next 12 months
- other reasonable grounds based on facts which are known or reasonably foreseeable.
As you can see, employers have actually retained significant discretion to determine whether there is a genuine and foreseeable role. But planning for this now becomes necessary.
But what should you do to prepare for this?
1 Get your records straight
You will need to ensure you know the initial engagement date for any casuals so that you comply with steps to notify eligible casuals. If your HR information system (HRIS) allows for dates to be entered, make sure casual conversion is now monitored. If you don’t have an HRIS, consider other options as simple as a calendar entry in your diary or payroll system.
While we talk records, have a way of tracking the amount of work you can reasonably foresee having – this information – and your ability to demonstrate it – will become critical as you consider and respond to each request.
2 Reconsider staff engagement strategies.
Engaging staff on a casual basis remains an important part of a how a business responds to the ups and downs of workflows and you will find that this may remain the case well into the future. The changes coming may instead help you to decide to convert casual staff over to part-time employment ahead of the 12 month conversion requirement. This could then influence how many further casual staff you take on… or let go of course and thus streamline your costs of employment.
Don’t forget, the premium paid to casuals (e.g. their higher base rate) will be removed from your costs of employment and full/part-time employees are more likely to be engaged and committed than casual staff. On this point, we hear from businesses regularly that retaining employees is often a priority for them (consider all that investment in training and teaching about the role only for a casual staff member to walk out the door with very limited notice).
3 Consider how you will review a request and put a system in place
A simple written process that explains how you will do this and the timeframes for each step (you will have 21 days to formally respond to each request) will help you quickly respond when the time comes.
4 Prepare your letter of notification
This is part of preparing so there isn’t a feeling of rushing when the time comes (and come it will). FWO have an example letter used for the Constructions Industry here.
When all is said and done…
This is not a new concept and there is a distinct chance that many businesses reading this already have an obligation under their award or enterprise agreement to convert casuals.
We also mustn’t overlook that some casual staff will not want to forego their higher rates of pay to become a part-time or full-time employee – which should prompt employers to consider their costs of employment regardless.
The takeaway message is that it is not simply an automatic conversion for a casual staff member and with open communications, planning and accurate record management, employers can fairly and quickly engage with their casual staff to make a decision that is best for both the employee and the business.
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