Casual to permanent conversion
In October 2018, many modern awards received a new clause that provided casual employees with an entitlement they did not have before.
Called ‘casual conversion’, this clause provides, in specific circumstances, casual employees the right to request their employment be made permanent (i.e. part-time or full-time employment)
But what is casual conversion, and how may it impact your business?
NB: this article will discuss casual conversion as it is laid out in the model clause. A model clause is the clause which has been incorporated as standard in the majority of awards. It is not included in all awards and you should always check the applicable modern award and seek advice relevant to your specific circumstances. This article is current as of January 2020.
What is casual conversion?
The casual conversion clause entitles casual employees to request to have their employment ‘converted’ to full-time or part-time work.
However, there are a few pre-conditions that need to be met. For example, the employee is required to have been working for at least 12 months with the employer, on a regular basis.
If an employee hands in a casual conversion request, an employer can only refuse it on reasonable grounds after consulting with the employee. Reasonable grounds include, but are not limited to, if the conversion would require a significant adjustment to a casual employee’s hours of work or if the employer could foresee the employee’s position as no longer existing in the next 12 months.
NB: As mentioned Award provisions can vary. For example, some Awards provide for the right to request casual conversion after 6 months.
What is the casual conversion clause?
The casual conversion clause has, as of January 2020, been inserted into the majority of Modern Awards.
Prior to that, some Awards had casual conversion provisions as it was standard practice in certain industries.
What is a long-term casual cmployee?
In the model casual conversion clause, a ‘long-term’ casual employee isn’t defined as such.
However, the clause does define what a ‘regular casual employee’ is – a casual worker who has worked a pattern of hours on an ongoing basis, for the past 12 months, which without significant adjustments could be performed on a permanent basis.
One condition that an employee must meet to successfully request casual conversion is that they are a regular casual employee.
Employee’s right to request casual conversion
Any casual employee can request casual conversion. But employees are not obligated to accept that request, if certain requirements are not met.One of those requirements is that the employee be a regular casual employee (discussed above) and has been working for the employer for at least 12 months. If they have been working equivalent full-time hours, they may request to have their work converted to full-time. And if they’ve been working less than the equivalent full-time hours, they may request part-time conversion.
When submitting a request to their employer, the request must be in writing.
Converting casual to permanent employment
If a request to convert is accepted by the employer, the two parties must then discuss and record (in writing) whether the employee will become a full-time or part-time employee.
If it is agreed that the employee is to become part-time, then any part-time employment requirements must be set. Such provisions may require that the employer and employee agree in writing to things such as the days the employee will work, the start and finish time on each day and the numbers of hours each week which will be worked.
The conversion will then take effect from the next pay-cycle, unless otherwise agreed.
Once an employee has successfully converted, they will remain a permanent employee unless there is a written agreement between the employer and employee to change the relationship again.
What does it mean for your business?
Begin forecasting
Keep a close eye on how the additional entitlements available to part-time and full-time staff could affect your business. This can be both financial, as well as the additional obligations you need to meet as an employer.
**Performance manage under-performing staff
If your casual staff are going to have the right to request part-time or full-time work after 12 months, then you want to make sure they’re the kind of staff you want to keep in your business long-term. If there are any under-performing casual staff in your business, start performance management plans early.
Get advice
Managing staff, entitlements and potential conversion of casual staff to part-time of full-time employees is a complex process. Don’t do it alone — get professional advice to protect your business.
For any advice on understanding and implementing these changes, call us on 1300 651 415 to discuss or fill out the form below for any enquiries.