Casuals Win Right to Request Permanency

Decision of the Full Bench of the Fair Work Commission

The full bench of the Fair Work Commission has drafted a model ‘casual conversion’ clause for insertion into 85 modern awards to allow certain casual employees to request their employment be converted to part-time or full-time.

The Commission determined that it was “fair and necessary” for long-term casual employees to have a mechanism to convert their casual employment to permanent employment, via a “casual conversion” clause.

The Commission accepted that many long term casual employees (who often work regular patterns and full-time hours) were dissatisfied with their casual employment status.[1]  The Commission reasoned that although the casual loading financially compensated casual employees for many forgone entitlements, the loading does not take into account the detriments of long term casual employment, which include:

• attending work while sick;
• not taking recreational leave out of concern for future employment prospects;
• lack of career path;
• diminished access to training and workplace participation;
• poorer health and safety outcomes; and
• the inability to obtain loans from financial institutions. [2]

The model clause will allow a “regular casual employee” to request that their employment be converted to full-time or part-time.

A “regular casual employee” is proposed to be a casual employee who has worked a pattern of hours on an ongoing basis over at least 12 months, where, without significant adjustment, the employee could work as a full-time or part-time employee.

The model clause proposes restrictions on the type of employment a regular casual employee can request. For example, a regular casual employee working less than 38 hours per week cannot request full-time employment, only part-time employment.

Employers will not be required to agree to each request. The employer can refuse the request on “reasonable grounds” as long as they consult with the employee and provide written reasons for the refusal within 21 days.
In the proposed model term “reasonable grounds” for refusal include:

1. it would require a significant adjustment to the casual employee’s hours of work in order for the employee to be engaged as a full-time or part- time employee in accordance with the provisions of the award – that is, the casual employee is not truly a “regular casual”;
2.  it is known or reasonably foreseeable that the regular casual employee’s position will cease to exist within the next 12 months;
3. 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; or
4. it is known or reasonably foreseeable that there will be a 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 which cannot be accommodated within the days and/or hours during which the employee is available to work.[3]

IMPLICATIONS

Interested parties are still able to make submissions on the proposed model clause, meaning the clause may be amended before being inserted into the relevant modern awards.

Most importantly, the proposed clause does not provide casual employees with a right to permanent employment, but rather, provides casual employees with a right to request permanent employment. The employer can refuse permanency on “reasonable grounds”, provided the employer consults with the employee.

Once finalised, the proposed model clause will impact on most industries as it will be inserted into 85 modern awards, including the:

• Aged Care Award 2010;
• Banking, Finance and Insurance Award 2010;
• Clerks Private Sector Award 2010;
• Fast Food Industry Award 2010;
• Social, Community, Home Care and Disability Services Industry Award 2010.

For more information regarding the proposed model casual conversion clause and what it may mean for your business, please contact us for advice specific to your circumstances.

We will keep you updated once the Commission finalises the clause.