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What you need to know about the Casual Conversion Clause

9 January, 2019 Monic Del Rosario

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.

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?

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 know 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

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Read more: Australian Penalty Rates: Retail Industry Update (Nov. 2018)

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