Casual employees to have the right to become permanent

Posted on July 7th, 2017

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On 5 July 2017, as part of its four yearly review of modern awards, the Fair Work Commission issued a decision dealing with casual employment.

A significant outcome of that decision is a recommendation that (subject to conditions) casual employees will have a right to be converted to permanent employment.

At least part of the reasoning behind the decision is that many of the “basic” entitlements of the National Employment Standards are not available to casuals. For example, where two workers were engaged by the same employer and both had worked for extended periods of time, a permanent worker would have the benefit of the National Employment Standards safety net, but a casual would not. The Fair Work Commission considered that was an unfair outcome, even though casual workers typically were paid an additional loading. The decision also took into account, amongst other things, the relative disadvantage that casual workers experienced in trying to obtain loans from financial institutions. 

Some modern awards already have a provision in them allowing casual workers to elect to become permanent. This decision, once implemented, will have the effect that all modern awards will have a similar clause.

The final form of provision has not yet been determined (and therefore no legal right of “conversion” yet exists for many casual workers) however it is anticipated the rule will be subject to conditions such as:-

  • There must have been casual employment for at least 12 months (the ‘qualifying period’);
  • During the qualifying period, the casual has worked a pattern of hours on an ongoing basis which could continue to be performed under the full time or part time provisions of the applicable award;
  • Employers must provide casual workers with a copy of the conversion clause within the first 12 months of employment; and
  • A request for conversion may be refused if it would require significant adjustment to the casual employee’s hours of work, or if it is reasonably foreseeable the casual’s position will cease to exist, or if the hours of work will significantly change or reduce within 12 months, or on ‘other reasonable grounds’.

Assuming these changes are implemented, it will represent a significant change in employment conditions for many casuals engaged under the terms of a modern award. It is a change that employers should anticipate will eventuate and for which they should prepare: Four Yearly Review of Modern Awards – Casual Employment and Part Time Employment [2017] FWCFB 3541 (5 July 2017).

 

Tony Cavanagh Director at Mullane & Lindsay Solicitors, NewcastleTony Cavanagh is a Director at Mullane & Lindsay Solicitors and practises extensively in Commercial dispute resolution and litigationand employment lawIf you require any assistance in these areas please contact Tony Cavanagh to arrange a consultation or contact our Newcastle or Sydney office. 

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