On 26 March 2021, the Fair Work Act 2009 (Cth) (FW Act) was amended to make significant changes to casual employment which affected every national system employer in Australia that employs casual employees. Our team has previously published an article on 26 March 2021 which outlines these important amendments (please see link here). The amendments created a new obligation to proactively offer eligible casuals conversion to permanent employment, whilst also allowing eligible employees to request conversion.
Employers have until 27 September 2021 to ensure that they have complied with the new casual conversion laws.
Casual Conversion Provisions
For casual employees of employers who employ 15 or more employees to be eligible for casual conversion, the employers need to consider whether the employees have:
- been employed for at least 12 months at the time of assessment (which for existing casual employees is 6 September 2021); and
- during at least the last 6 months of that period, worked a regular pattern of hours on an ongoing basis which, the employee could continue to work as a full-time employee or a part-time employee (as the case may be) without significant adjustment.
If the above eligibility for conversion is satisfied, the casual employees must be offered conversion to permanent employment in writing from the employer, unless an exclusion applies.
For casual employees employed prior to 27 March 2021, this offer needs to be made by 27 September 2021. Otherwise, for casual employees employed after 27 March 2021, this needs to be done within 21 days of the casual employee reaching their 12-month anniversary.
If an employee accepts the offer of conversion to permanent employment (this must be done in writing within 21 days of receiving the letter), then the employer must send them a permanent employment agreement for signing and return. If an employee does not respond, they are taken to have declined conversion. This agreement should specify: (a) whether the employment is permanent full-time or part-time; (b) the employee’s hours of work; and (c) the conversion date. The employer must also discuss these matters with the employee before issuing the permanent employment agreement or giving notice.
Employers are not required to make an offer of casual conversion if there are reasonable grounds for not doing so, based on facts which are known or reasonably foreseeable at the time of the decision not to make the offer.
Reasonable grounds include (but are not limited to) cases where within 12 months:
- the employee’s position will cease to exist;
- the employee’s required hours of work will be significantly reduced; or
- there will be a significant change in the employee’s pattern of work (e.g. days or hours the employee is required to work) and those changes cannot be accommodated within the employee’s available days or hours.
If the employer decides not to make an offer of casual conversion (whether due to the casual not being eligible or on the reasonable grounds basis) then the employer must, within 21 days of the 12 month anniversary, send the employee a letter notifying them of this fact and explaining that the conversion will not be offered because they have not worked a regular pattern of hours for 6 months or because there are reasonable grounds to refuse conversion.
Whilst employers are only required to assess an employee’s eligibility for conversion and make a conversion decision on the employee’s first anniversary, employees retain a right to request a conversion at any time after their 12 month anniversary.
Casual Employment Information Statement
The Casual Employment Information Statement must be provided by an employer to an employee before, or as soon as practicable after, an employee commences employment as a casual employee with that employer. Note that all employees must still also be provided with a copy of the Fair Work Information Statement.
The Casual Employment Information Statement must be provided to existing employees employed by small business employers as soon as practicable, or as soon as practicable after 27 September 2021, for employers who employ 15 or more employees.
The Casual Employment Information Statement is available to download here.
What does this mean for Employers?
Employers need to determine before 27 September 2021 if they have an obligation to offer casual conversion and to write to a casual employee who commenced prior to 27 March 2021 to advise the employee if they will be offered the right to convert to permanent employment.
Employers need to set up a process for offering, accepting and declining requests for conversion.
Employers need to update casual employment agreements to ensure that they are consistent and align with the new casual conversion laws.
Employers need to create a suite of documents to enable compliance with the new casual conversion laws.
If your business requires assistance in determining an employee’s eligibility for casual conversion and in drafting letters to employees offering conversion or notifying that conversion is not being offered, please contact a member of our Group.
This article was written by Mark Howard, Partner and Renee Karakinos, Associate.