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Converting casual employees to permanent employment

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As of 27 September 2021, Australian employers must assess the eligibility of all casual employees for conversion to permanent employment, under the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 (FWA).

Which casual employees are eligible for permanent employment?

The FWA makes it mandatory for employers to offer a casual employee to convert to full or part-time employment if they meet the following eligibility criteria:

  1. the employee has worked for the employer for a 12-month period;
  2. the employee has worked a regular pattern of work on an ongoing basis for at least the past 6 months; and
  3. the employee could continue to work the same hours as a permanent employee, without significant adjustment.

A regular pattern of hours on an ongoing basis

There is no definition in the FWA as to what a regular pattern of hours for a casual employee is. When assessing this an employer should consider if the casual employee’s current pattern of work reflects  the hours of a full time or part time employee, even if their hours have fluctuated over the period. If their hours do reflect  permanent employment and would not require significant adjustment to convert them to full time or part time, an employer should make an offer, unless they have reasonable grounds not to.

If the employee is eligible, employers are required to make an offer to convert to permanent employment. If the employee is not eligible, employers must give written notice to the employee setting out why (on reasonable grounds) they are not eligible for conversion.

What about employees covered by a modern award?

The  FCW is reviewing all modern awards to ensure that their casual employment provisions remain consistent with the FW Act. Our Casual Conversion “Cheat Sheetprovides two examples of how the provisions may differ.

Reasonable grounds to not offer a casual employee permanent employment

Employers are not required to make an offer of conversion to a casual employee if there are reasonable grounds to not make the offer, including:

  • the employee’s position will cease to exist within 12 months of refusing to offer conversion;
  • the hours of work which the casual employee performs will be significantly reduced within the 12-month period;
  • there will be a significant change in the 12-month period in the days on which, or the time at which, the employee’s work is to be performed and those changes cannot be accommodated within the days or times the employee is available to work; or
  • making the offer would not comply with a recruitment or selection process required by or under the law of the Commonwealth or state or territory.

These reasonable grounds must be based on facts that are known, or reasonably foreseeable, at the time of deciding to not make the offer.

If an employer decides to not make an offer to the employee, they must give written notice within 21 days of the employee’s one-year work anniversary which sets out why they are not being made an offer of permanent employment.

The employee must then respond within 21 days, or else they are taken to have accepted the employer’s decision.

How to make an offer to convert an eligible casual employee to permanent employment

If an employer decides to make an offer to convert to permanent employment, it must be in writing within 21 days before the one-year work anniversary. It must offer either one of the following types of employment:

  • Full-time employment: If the employee has worked the equivalent of full-time hours, during the last 6 months on an ongoing basis
  • Part-time employment: If the employee has worked less than the equivalent of full-time hours during the last 6 months

If the employee accepts the offer, the conversion to full-time or part-time employment takes effect on or after the day specified in the written notice.

When can an eligible employee request conversion to permanent employment?

An employee can request a casual conversion from 28 September 2021 in writing if:

  1. They have not refused an offer to be converted to permanent employment;
  2. They have not been provided with a notice on reasonable grounds to not be converted to permanent employment;
  3. The employer has not given a response refusing a previous request of conversion;
  4. The employer is not a small business

If an employer receives a request, they must within 21 days of the request being made:

  1. Consult with the employee to inform them if their request has been granted or refused
  2. If the request has been granted, the employer must inform the employee if they will convert to full-time or part time employment, what their hours of work will be and when it will take effect.
  3. If the request has been refused, the employer must inform the employee on reasonable grounds why it has been refused.
  4. Follow up in writing setting out the decision made.

What are the obligations of employers after the 27th of September 2021?

Employers have an ongoing obligation to:

  1. Issue the Casual Employment Information Statement (CEI Statement) to all casual employees employed after 27 March 2021 and to any future casual employees.
  2. Offer casual conversion for eligible employees who are approaching their 12 months of employment and provide them with a written notice.
  3. Provide written notice within 21 days of an employee approaching their 12 months of employment who will not be made an offer setting out why on reasonable grounds they will not be offered casual conversion.
  4. Comply with the requirements of the FWA if an employee makes a request to be converted to permanent employment.
  5. Employers must not deliberately vary or reduce an employee’s hours of work in order to avoid their obligations or to deprive an employee of their new entitlement to seek casual conversion.
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Friday Workplace Briefing – Finale

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