Legal Update

Casual to Permanent Conversion: Important Upcoming Changes Relating to Casual Employment

Authors:  Sarah Younis and Sarah Baradan

Earlier this year, the Federal Government passed the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 (Cth) (the “Act”) which introduced significant changes relating to casual employment that have implications for employers. Of most significance is that by 27 September 2021, employers (other than small business employers) need to:

• assess whether any of their existing casual employees employed before 27 March 2021 are eligible to be offered to convert to permanent employment; and
• make a written offer to convert their casual employee to permanent employment or write to the employee explaining why they won’t be making an offer.

Equally, certain casual employees will have a right to request conversion to permanent employment from 28 September 2021. As these dates are fast approaching, this Client Alert explains the enhanced casual conversion rights and the circumstances in which employers would be required to offer eligible casual employees an opportunity to convert to full-time or part-time employment.

New casual conversion requirements and entitlements
Offers
A new section 66B in the Act requires employers, other than small business employers with less than 15 employees, to make offers for casual conversion in certain circumstances. It is mandatory for employers to make a casual conversion offer if:

• the employee has been employed for 12 months;
• during at least the last 6 months of that period, that employee has worked a regular pattern of hours on an ongoing basis; and
• the employee’s regular hours could continue as a full-time or part-time employee without significant changes.

Offers of permanent employment must be in writing and should reflect the hours worked by the employee. Employees must respond to the offer in writing within 21 days of the offer.

Employers should be aware that they are prohibited from varying or reducing an employee’s work hours for the purpose of avoiding their obligation to offer that employee casual conversion.

Employers will not be required to make an offer of casual conversion if the employee is not eligible or if the employer has “reasonable grounds” not to do so. The new casual conversion provisions provide the following examples of “reasonable grounds”:

• the employee’s position will cease to exist within 12 months;
• the employee’s hours of work will be significantly reduced in that period;
• there will be a significant change in the employee’s days and/or times of work which cannot be accommodated within the days or times the employee is available to work; or
• the offer would not be consistent with a recruitment or selection process that is required by or under a law of the Commonwealth or a State or a Territory.

If an employee is not eligible or does not meet the requirements, the employer must inform them of this in writing by no later than 27 September 2021.

Requests
Casual employees, including casuals of small businesses, have a right to request conversion to permanent employment in writing if:

• the employee has been employed for 12 months; and
• during at least the last 6 months of that period, that employee has worked a regular pattern of hours on an ongoing basis;
• the employee’s regular hours could continue as a full-time or part-time employee without significant changes.

Employers cannot reject such requests unless they have “reasonable grounds” to do so and they have consulted the employee.

For an employee to make a request, the following conditions must also be satisfied:

• an employer offer has not already been made and rejected in the last 6 months;
• in the last 6 months, the employer has not notified the employee that a conversion offer would not be made on reasonable grounds; and
• the employer has not already rejected a conversion request in the last 6 months.

Transitional arrangements employers should be aware of
For casual employees who were employed prior to 27 March 2021, employers are required to conduct assessments for these casual employees by 27 September 2021.

Employers are also required to make an offer of casual conversion to eligible employees in writing within 21 days of the date of the assessment and by no later than 27 September 2021. Equally, if the employee does not meet the requirements for casual conversion, they must be notified of this in writing by the employer by no later than 27 September 2021.

After 27 September 2021, employers will be required to assess casual employees within 21 days of the end of their 12 month anniversary and either make an offer of casual conversion or provide them with written reasons for their refusal to make the offer.

Casual Employee Information Statement
Section 125B requires employers to provide new casual employees who were employed on or after 27 March 2021 with a copy of the Casual Employee Information Statement (CEIS). The CEIS must be provided before, or as soon as practicable after, the employee starts employment as a casual employee.

In relation to existing casual employees who were employed before 27 March 2021, employers must provide a copy of the CEIS as soon as practicable after 27 September 2021. The CEIS, which has been published by the Fair Work Ombudsman is available on the Fair Work website here.

Action employers should take by 27 September 2021
To ensure compliance with the new casual conversion provisions, employers should consider taking the following steps before the transition period ends on 27 September 2021:

• conduct an assessment of each casual employees’ circumstances and determine whether your casual employees who have been employed for at least 12 months are eligible to receive an offer for casual conversion;
• offer each eligible casual employee conversion to full time or part-time employment in writing or provide them with written reasons for not making an offer, within 21 days of assessing the employee’s eligibility;
• provide causal employees with the CEIS published by the Fair Work Ombudsman;
• implement systems or processes for reviewing casual employees’ conversion to permanent employment to prevent administrative errors and to ensure compliance with the new casual conversion obligations; and
• prepare templates for making offers of casual conversion, refusing a request for casual conversion and declining to offer casual conversion.

If you require advice on this topic or assistance with implementing systems and processes to ensure compliance with the new casual conversion obligations, please reach out to our team of specialists.

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www.harmers.com.au

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