11 Feb CASUAL CONVERSION – ARE YOU NOTICE COMPLIANT?
As at 1 October 2018, a number of Modern Awards were updated to include a “casual conversion clause”. The casual conversion clause gives “regular casual employees” the right to request their employment status be converted to permanent. The employee must demonstrate that they have been employed for a certain period of time as stipulated in the Modern Award (e.g. six (6) months or 12 months) and have “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”.
Many employers do not realise that the clause creates a positive obligation for employers to notify new and existing casual employees of their conversion rights under the applicable Modern Award.
Specifically, all employers who have casual employees covered by a Modern Award which contains a casual conversion clause, were required to notify all existing casual employees (i.e. already employed as at 1 October 2018) of the new clause and provide a copy of the relevant provision of the Modern Award by 1 January 2019. If you have not yet notified existing casual employees of their rights under the casual conversion clause, please do so as soon as practicable. This notification requirement applies irrespective of whether the employee has regular shifts or not.
In regard to new casual employees, you must provide the notification in accordance with the terms set out in the applicable Modern Award. The time for notification can vary, for example it can be required:
1. within the first 12 months of the casual employee’s first engagement to perform work (whether they are a regular causal employee or not) (see for example clause 12.5 (p) of the Clerks—Private Sector Award 2010, clause 13.5(p) of the General Retail Industry Award 2010, clause 13.5 (p) of the Fast Food Industry Award 2010 and clause 13.7(p) of the Hair and Beauty Industry Award 2010); and
2. within four (4) weeks of a regular casual employee being engaged by their employer for a sequence of periods of employment under the Modern Award during a period of six months. We recommend this be done upon their engagement (see for example clause 13.4 (b) of the Food, Beverage and Tobacco Manufacturing Award 2010, clause 14.8(c) of the Building and Construction General On-Site Award 2010 and clause 14.4(b) of the Manufacturing and Associated Industries and Occupations Award 2010).
If employers have not or do not comply with the notification obligations above, they will be in breach of the Modern Award. Failure to comply with your obligations under a Modern Award is a contravention of the Fair Work Act 2009 (Cth) for which penalties can be imposed and you may be subject to dispute proceedings.
What employers need to do:
1. Check the Modern Award/s that apply to your casual employees to see if the casual conversion clause has been included. Note that the conversion clause may vary across Modern Awards.
2. Keep accurate records of notification provided to your employees. Records may be required to demonstrate compliance with your obligations at law.
3. It may also be helpful to check your payroll system is equipped to handle employee conversions from casual employment to permanent employment.
Keep in mind:
(a) If a casual employee transfers to permanent employment they will no longer be entitled to receive casual loading. As such, many casual employees may choose not to convert their employment status.
(b) If an employer receives a conversion request, they must respond in writing within 21 days of receipt.
(c) An employer can refuse a casual employee’s request to transition to permanent employment on reasonable grounds.
If you are unsure about your obligations under the new casual conversion clause or require assistance notifying your employees about their rights under the casual conversion clause, please contact HR Law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.