Blog

The new casual conversion right explained

15/12/2020

The introduction of the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 has brought a number of proposed changes to the rights of casual employees in Australia.

One of these changes, which was spruiked by Christian Porter as being a particularly “strong” right for employees, was the right to be converted to permanent employment.

While casual conversion clauses already appear in some modern awards, the Bill now proposes the introduction of a new section in the Fair Work Act 2009 (Cth) which would compel all national system employers to offer casual employees an opportunity convert to permanent employment if they have been employed for 12 months and have worked a regular pattern of hours on an ongoing basis for at least the last six months of that period.

Unfortunately, this new “right” is subject to a series of qualifications and exceptions, one of which is that an employer does not have to offer conversion to permanent employment if it has “reasonable grounds” not to do so. Reasonable grounds includes the following:

  • the employee’s position will cease to exist within 12 months
  • the employee’s hours of work will be significantly reduced in that period; and
  • there will be a significant change in the days or times that the employee is required to work which cannot be accommodated.

This is an incredibly broad exception that would allow an employer to speculate that workloads might change at some point within the next 12 months and that a permanent relationship cannot therefore be reasonably accommodated.

As to the process involved, if the employer decides not to make an offer, it must give written notice to the employee and explain the reasons it has decided not to do so.

If, notwithstanding the broad exception, an employer does decide to make an offer, the employee must respond to the offer in writing within 21 days otherwise they are taken to have rejected the offer.

If the employee accepts an offer, the employer must discuss with the employee their hours, whether the employment is part time or full time and the date that the permanent employment will take effect. It must also confirm all of this in writing within 21 days of the employee’s acceptance.

While employees have a “residual right” to request casual conversion every six months if they qualify, employers still retain the right to reject the request on reasonable grounds.

The qualifications and exceptions built into the Bill are then worsened by the fact that employees are not able to even enforce their limited right to be converted to permanent employment.

The Bill provides that if an employer does not agree to convert an employee to permanent employment, they should first try and resolve the dispute between themselves. If this is not successful, either party can refer the matter to the Fair Work Commission for conciliation. If this is not successful, the Fair Work Commission can arbitrate the dispute, only if both parties agree.

In other words, an employer can reject a request from a casual employee to become a permanent employee and can then refuse to have that rejection examined by the Fair Work Commission. This effectively means that employers become the judge and jury as to when, how and if a casual employee becomes a permanent employee.

The Bill also provides that the employer can “opt out” of this dispute resolution process by including their own dispute resolution process in the employment contract. Therefore, employers are given the power to control not only the outcome of the casual conversion request, but also the process that follows.

These tokenistic provisions in the new Bill are incredibly deflating for casual employees, who have been the hardest hit by the pandemic. Contrary to the comments made by the Attorney-General, this is not a “right” given to casual employees at all. It is simply a half-hearted effort to placate the growing concern about the increasing casualisation of Australia’s workforce. The federal government must do better if it genuinely wants to assist casual employees.

Further updates about the progress of the Bill will be provided as it makes its way through federal parliament over the coming months.