Employer update – casual conversion
On 1 October 2018, a significant change to the majority of modern awards came into effect. This change, referred to as ‘casual conversion’, affects most employers across Australia, including those operating in the hospitality and retail industries.
In short, casual conversion provides a pathway to casual employees, who, if certain criteria are met, may be entitled to convert their employment status from casual to part-time or full-time.
How does it work?
Broadly speaking, casual conversion allows casual employees whose employment is ‘regular’ to request that their employer convert their casual employment to part-time or full-time employment.
For an employee to satisfy the requirement that their casual employment is ‘regular’, they must have worked the equivalent of 38 hours per week (i.e. full-time equivalent) over the preceding 12 months.
For an employee who has worked less than 38 hours per week over the preceding 12 months, they may request to have their casual employment converted to part-time employment, based on the equivalent hours they have worked.
Any casual conversion request from an employee must be made in writing.
Can an employer refuse the casual conversion request?
Yes, an employer may refuse a casual conversion request.
However, refusal must be based on reasonable grounds. Furthermore, the employer must consult with the employee on their decision.
Reasonable grounds may include the following:
- That casual conversion would require a significant adjustment to the casual employee’s hours of work.
- It is known or reasonably foreseeable that the casual employee’s position will cease to exist within the next 12 months.
- It is known or reasonably foreseeable that the hours of work which the regular casual employee is required to perform will be significantly reduced in the next 12 months.
- It is known or reasonably foreseeable that there will be significant change in the days and/or times at which the employee’s hours of work are required to be performed in the next 12 months.
Should the employer refuse an employee’s casual conversion request, such refusal must be communicated to the employee in writing, within 21 days of the casual conversion request being made.
Should the employer and employee not see eye to eye on the casual conversion request, the matter may be referred to the Fair Work Commission under the relevant dispute resolution clause in the applicable Modern Award.
Should an agreement on casual conversion be reached, such an agreement must be reduced into writing, and also record the new form of employment (i.e. part-time or full-time).
What should I do now?
An update to a Modern Award (such as this) presents a great opportunity to review your business’s employment policies and procedures.
Ensure you know if a Modern Award applied to your business and employees. If one does apply, familiarise yourself with its terms.
If you have casual employees, make sure you provide them with a copy of the casual conversion clause by no later than 1 January 2019.
Most importantly, should an employee request casual conversion, don’t assume such conversion will be detrimental to your business. Consider the upsides, such as greater employee engagement.
Should you not be able to accommodate a casual conversion request, seek professional advice first, to ensure that your reasons for refusal are clear and comply with the relevant Modern Award.
Finally, remember that the requirement to consult your employee does not simply mean communicating your decision. Rather, consultation requires you to take the time to sit down with your employee and discuss with them, openly and frankly, your views and concerns on casual conversion. Likewise, you must also listen to, and consider, the views and concerns of your employee.