What you need to know about the Casual Conversion Clause

Monic Del Rosario

9 January 2019    |   

On 1 October 2018, the Fair Work Commission announced that a new casual conversion clause will be included in 80+ modern awards across Australia. What does it mean? Casual conversion is a right given to regular casual staff to request for full-time or part-time employment status, given certain prerequisites. In the awards, a ‘regular casual employee’ is: “A casual employee who has, in the preceding period of 12 months, worked a pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to perform as a full-time employee or part-time employee under the provisions of this award.” Businesses whose awards fall under mandate are required to advise their casual employees of this clause. This does not require employers to offer conversion to their eligible employees; rather, the clause entitles all eligible employees the right to request for conversion. Who can apply? The clause allows casual workers to apply for conversion if: They have  been working for the business for twelve (12) months; and Their work pattern is an ongoing number of hours over the past year, which can be continued without adjustment upon conversion to full-time or part-time. Employers must provide casual employees with a copy of the casual conversion clause within their first year of initial engagement with the business. Casual employees who are eligible to apply should request their employers in writing. Can applications be rejected? Yes, applications can be rejected. Reasonable grounds include: A significant adjustment of work hours for the employee in order to accommodate their full-time or part-time employment status; The employee worked for short periods and/or irregular shifts or hours; and The position of the casual employee will cease to exist in the foreseeable future. Rejection of applications can be done, given that both employee and employer have discussed the decision. Should employers not convert a casual employee, a written refusal must be provided, indicating the reasonable grounds of rejection. Read more: What is the Contingent Workforce and how can you leverage it in your business? What awards are covered? The introduction of the clause covers 80+ modern awards, including: Hospitality Industry (General) Award 2010; Food, Beverage and Tobacco Manufacturing Award 2010; Manufacturing and Associated Industries and Occupations Award 2010; Building & Construction General On-site Award 2010; Concrete Products Award 2010; Electrical, Electronic & Communications Contracting Award 2010; Graphic Arts, Printing and Publishing Award 2010; Plumbing and Fire Sprinklers Award 2010; Textile, Clothing, Footwear and Associated Industries Award 2010; and Vehicle Manufacturing, Repair, Services and Retail Award 2010 To check if your business is included, click here. What should your business do next? It’s important to keep in mind that Fair Work’s decision does not require businesses to convert casual employees in all cases where a casual employee makes a request for conversion to their employer.  For this reason, it’s important to understand the criteria for casual conversion and understand what your obligations are when employees meet these requirements. If you or your business falls under the new clause, here are the steps you can take to stay compliant: Check your modern award or enterprise agreement. Awards with existing clauses for casual conversion may have different requirements. Check your award for the exact rules in your industry. Create a casual conversion letter. You can also download a copy here. Notify your employees. Make sure you give your casual staff (employed as of 1 October 2018) a copy of the final letter. Record the outcome of the casual conversion offer. Whether they accept or reject the offer, keep copies of their written responses for future reference. If you are unsure how the casual conversion clause affects your business, call the Fair Work Infoline on 13 13 94 or visit www.fairwork.gov.au To make sure you stay updated with the latest news on awards, employment, and compliance, subscribe to our newsletter today.

On 1 October 2018, the Fair Work Commission announced that a new casual conversion clause will be included in 80+ modern awards across Australia.

What does it mean?

Casual conversion is a right given to regular casual staff to request for full-time or part-time employment status, given certain prerequisites. In the awards, a ‘regular casual employee’ is:

“A casual employee who has, in the preceding period of 12 months, worked a pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to perform as a full-time employee or part-time employee under the provisions of this award.”

Businesses whose awards fall under mandate are required to advise their casual employees of this clause. This does not require employers to offer conversion to their eligible employees; rather, the clause entitles all eligible employees the right to request for conversion.

Who can apply?

The clause allows casual workers to apply for conversion if:

  • They have  been working for the business for twelve (12) months; and
  • Their work pattern is an ongoing number of hours over the past year, which can be continued without adjustment upon conversion to full-time or part-time.

Employers must provide casual employees with a copy of the casual conversion clause within their first year of initial engagement with the business.

Casual employees who are eligible to apply should request their employers in writing.

Can applications be rejected?

Yes, applications can be rejected. Reasonable grounds include:

  • A significant adjustment of work hours for the employee in order to accommodate their full-time or part-time employment status;
  • The employee worked for short periods and/or irregular shifts or hours; and
  • The position of the casual employee will cease to exist in the foreseeable future.

Rejection of applications can be done, given that both employee and employer have discussed the decision. Should employers not convert a casual employee, a written refusal must be provided, indicating the reasonable grounds of rejection.

Read more: What is the Contingent Workforce and how can you leverage it in your business?

What awards are covered?

The introduction of the clause covers 80+ modern awards, including:

  • Hospitality Industry (General) Award 2010;
  • Food, Beverage and Tobacco Manufacturing Award 2010;
  • Manufacturing and Associated Industries and Occupations Award 2010;
  • Building & Construction General On-site Award 2010;
  • Concrete Products Award 2010;
  • Electrical, Electronic & Communications Contracting Award 2010;
  • Graphic Arts, Printing and Publishing Award 2010;
  • Plumbing and Fire Sprinklers Award 2010;
  • Textile, Clothing, Footwear and Associated Industries Award 2010; and
  • Vehicle Manufacturing, Repair, Services and Retail Award 2010

To check if your business is included, click here.

What should your business do next?

It’s important to keep in mind that Fair Work’s decision does not require businesses to convert casual employees in all cases where a casual employee makes a request for conversion to their employer.  For this reason, it’s important to understand the criteria for casual conversion and understand what your obligations are when employees meet these requirements.

If you or your business falls under the new clause, here are the steps you can take to stay compliant:

  1. Check your modern award or enterprise agreement. Awards with existing clauses for casual conversion may have different requirements. Check your award for the exact rules in your industry.
  2. Create a casual conversion letter. You can also download a copy here.
  3. Notify your employees. Make sure you give your casual staff (employed as of 1 October 2018) a copy of the final letter.
  4. Record the outcome of the casual conversion offer. Whether they accept or reject the offer, keep copies of their written responses for future reference.

If you are unsure how the casual conversion clause affects your business, call the Fair Work Infoline on 13 13 94 or visit www.fairwork.gov.au

To make sure you stay updated with the latest news on awards, employment, and compliance, subscribe to our newsletter today.

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The Different Kinds of Award Interpreters

We often chat to people who have looked at a few different award interpretation tools on the market. Most are not really sure which award interpretation tool is right for their business.  In this post, we’re going to take a look at the different kinds of award interpreters out there to help you understand what is important when looking for a tool for you or your clients. Firstly, an Award Interpreter (read about Tanda’s Award Interpreter) is software that figures out how much staff should be getting paid based on their hours and times worked.  What award interpreter is right for you? There are four different kinds and the right one depends on how your staff get paid. Salary Costing Tools: Used to calculate payroll when all your staff are paid a fixed salary. Hourly Wage Calculators: Calculates when staff get paid a single hourly rate for all hours worked. Single Rate Calculators: Pays staff only single types of pay like weekday, Saturday and Sunday rates. However, it cannot handle any of the more common rate scenarios set out in Awards. Award Rule Engines: Does all of the above. In addition, they also calculate overtime, penalty rates, allowances, accruals and leave. “All my staff get paid a salary.” If you only employ salaried staff, a Salary Costing Tool is perfect for you. This is common in white collar workforces like accounting firms. In this case, you enter each employee’s yearly salary, set rules about how leave accrues and the tool does the rest. This is simple because staff are paid the same thing most pay runs. Most payroll systems (including MYOB and Xero) already include such a tool. If this is you, you’re in luck – you will not need an additional system for award interpretation! “My staff get paid the same hourly rate for all hours worked.” This might come up if you run a very small business with only a few staff. This is where nobody works on weekends, receives overtime or penalty rates. Generally, this means the business is only open for a few hours on days that it does open. If that’s you, you’re after an Hourly Wage Calculator. Warning: Be careful with this one. It’s easy to miss subtle wordings in Awards that require you to pay different rates at different times. Keep in mind that if any of your staff ever get more than one pay rate in a week, an hourly wage calculator won’t work as well anymore (even if it doesn’t regularly happen). Using an Hourly Wage Calculator, you enter the hourly rate for each employee. Each week you only enter the number of hours worked (you don’t worry about times). The tool multiplies the hourly rate by the number of hours to calculate total pay. Most payroll systems (including MYOB and Xero) already include such a tool, so if this is you, you’re also in luck – you won’t need an additional system for award interpretation! “I employ only one type of employee. 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About the author

Monic Del Rosario

Monic is Tanda's content curator. She uses her background in Development Studies to create materials that are both business-oriented and human-centric.

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