The "Casual Conversation’ Clause: What it means for your business

A landmark decision of the Fair Work Commission (‘FWC’) has brought widespread change to Australia’s casual workforce.

On 5 July 2017 the FWC handed down a decision which means that casual employees will now have the right to request permanent employment if they work regular hours over a 12 month period.

The application for a casual conversion clause was brought by the ACTU and the AMWU as the unions argued that there was an inherent unfairness in long term casual employees not being able to access the benefits of the National Employment Standards (‘NES’), particularly personal and annual leave.

The FWC accepted that there were a number of reasons why employees would accept long term casual employment including personal, economic and family reasons together with a lack of employment opportunities. Taking into account these aspects, the FWC considered that the denial of access to the NES at the election of the employer gave rise to an unfairness in only long term circumstances and that the employee should be provided with at least the opportunity to access the benefits of the NES.

The FWC therefore recommended that a model ‘casual conversion clause’ be inserted into 85 modern awards which will have the following features:

• there will be a minimum qualifying period of 12 months for a casual employee;
• during the qualifying period a casual employee will have to work a pattern of hours which, without significant adjustment, could continue if the employee was to become part or full time;
• the employer must provide all casual employees with a copy of the proposed clause.

The decision certainly reflects the changing views of the industrial umpire’s position on the traditional employment concept of casual employment.

There is however a discretion for an employer to reject the request of an employee in the following circumstances

·       The request would require a significant adjustment to the casual employee's hours of work;

If it is known or reasonably foreseeable that the casual employee's position will cease to exist;

• If the employee's hours of work will significantly change or be reduced within the next 12 months; and

• On other reasonable grounds based on facts which are known or reasonably foreseeable.

• It will be interesting to see the practical implications of the decision of the FWC and whether the changes see a rise in the casual workforce.

During the hearing the ACTU asserted that there had been an exploitation by employers of long term casual employees. This was however rejected by the FWC who noted that data confirmed that the rate of casual to permanent employment had not altered over the years.

The decision of the FWC is however still in its infancy with further submissions to be made to the FWC by interested parties but the substance of the decision is unlikely to change.  

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 CONTACT

For additional information, advice and/or assistance contact our Workplace Relations Team on (02) 8324 7500 or alternatively email Simon Berry (Partner) on sberry@hilliardandberry.com.au or Andrea Willits (Senior Associate) on awillits@hilliardandberry.com.au.