The Full Bench of the Fair Work Commission (Commission) has decided to insert a model casual conversion clause into the majority of those modern awards which did not already have this type of clause, including awards in the retail, restaurant, banking, aged care, mining, maritime and transport industries.
This change comes in response to numerous union and employer groups applications as part of the Commission’s four yearly review of modern awards.
The Commission considered that this change was necessary to ensure that the overall objective of modern awards is met and that it would not affect the cost to employers in any discernible way.
The proposed model clause will give casual employees covered by those awards the right to request to convert to part-time or full-time employment if:
Employers must provide all casual employees (whether a “regular casual employee” or not) with a copy of the model casual conversion clause within 12 months of commencing employment.
A casual employee who meets the above criteria can request to convert their employment to full-time or part-time, based on whether they have worked on average 38 hours per week or less.
Where an employer agrees that an employee should be converted from being a casual employee to a part-time or full-time employee, then this must be recorded in writing and confirmed to the employee.
Employers can refuse a casual employees request to convert to part-time or full-time employment on reasonable business grounds, including if:
Employers must consult with employees before refusing such a request and must provide reasons for any refusal in writing within 21 days of the request being made. An employee can challenge the employer’s refusal through the dispute resolution clause of the applicable award.
Employers cannot engage or re-engage an employee, or vary or reduce their hours, so as to avoid any rights or obligations under this model conversion clause.
The proposed clause has not yet been inserted into the modern awards, however employers with casual employees covered by these awards should be aware of these upcoming changes and will need to put in place a system to:
It remains to be seen the extent to which casual employees will seek to avail themselves of the conversion provisions and to what extent a large scale move to convert will impact employer’s labour models where there is substantial reliance on casuals.
As part of the modern award review, earlier this year a Full Bench of the Commission also decided to vary the General Retail Industry Award 2010, Fast Food Industry Award 2010 and Hair and Beauty Award 2010 (together, the Awards) to provide casual employees with an entitlement to overtime penalty rates.
The decision came after submissions were received from unions and employer bodies, with the Commission ultimately agreeing it was ‘inexplicable’ that casual employees did not have the benefit of overtime penalty rates afforded to full-time and part-time employees.
The Commission rejected submissions that making such an amendment to the Awards would result in a significant costs burden for employers, on the basis that most casuals in the industries covered by the Awards do not work the equivalent of full time hours.
As a result, casual employees covered by the Awards will be entitled to overtime penalty rates when:
These amendments will come into effect from 1 January 2018.
As a result of these amendments, employers with casual employees covered by the Awards will need to put in place a system to:
Employers who heavily rely upon casual employees working substantial hours per week will need to do a cost benefit analysis and if required adjust their labour arrangements to ensure there is not a labour cost blow out.
Gadens’ Employment Advisory Team can assist employers with more detailed advice on modern award compliance issues and ensuring compliance with these casual employment changes.