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**Update 10th November 2023**

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Proposed amendments introduced 4th September 2023 under the Fair Work Act 2009 (Cth) (FW Act)

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The proposed amendments involve a refined definition of casual employees - an employee is deemed casual if there is uncertainty surrounding ongoing employment, thus the employee is paid casual loading to compensate.  

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Current Requirements 

A casual employee who has worked for their employer for 12 months with consistent working hours will need to be offered the option to switch to full-time or part-time (permanent) employment. 

Proposed Amendments

Employers to offer or employees to request to convert to permanent after 6 months rather than 12.  

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Current Requirements 

Employers with less than 15 employees don’t have to offer casual conversion but it can be requested by the employee within 21 days of their anniversary date.

Proposed Amendments

Employers with less than 15 employees must offer casual conversion but employees will be required to have worked a minimum of 12 months. 

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If your business has employed casual employees since October 1, 2018, chances are you’ve heard about the ‘Casual Conversion’ clause that has come into place across Australia. These updates to the Fair Work Act 2009 give casual employees the right to request a full-time or part-time position after working with a company for 12 months.

So, what does that mean for your business? How should your business respond to such requests? Does your casual employee have these prerequisites to fall under the casual conversion regulations? What’s in it for your casual employee?

We’ve put together a general overview and compliance note to help you navigate these new changes. Before we jump into those questions, let’s summarise the obligations of the casual conversion clause.

DISCLAIMER: Please note, that this blog post does not outline all legal obligations of the casual conversion clause, and is to be used as an informational starting point and guide only. We encourage you to seek legal advice to ensure your company is up-to-date and compliant with the casual conversion law outlined for your particular Award(s).

What are the eligibility requirements?

• Who is eligible for casual conversion?

• Casual employees who have worked for the employer for at least 12 months, under these 85 Awards. They may request casual conversion at any time prior to, during or after this period.

• Over those last 12 months, the casual employee must have worked a pattern of regular hours on an ongoing basis. Converting to a permanent staff member should not require a significant adjustment to their current hours.

• Be able to continue working these hours as a full-time or part-time employee

What is the process?

• Employers with 15+ employees must offer casual conversion to employees once they reach 12 months of employment. This has to be offered within 21 days of their anniversary date. 

• Employers with less than 15 employees don’t have to offer casual conversion but it can be requested by the employee within 21 days of their anniversary date.
  

Are there exceptions?

Reasonable grounds not to offer or accept conversion to permanent work need to be in writing and need to be done within 21 days of the employee’s anniversary date.

• The employee hasn’t worked consistent hours on an ongoing basis for at least the last 6 months. 

• Employees have refused an offer from their employer to convert to permanent employment in the last 6 months 

• The business has reasonable grounds for not making an offer e.g. employee’s position will no longer exist, modification to the employee’s work hours/schedule 

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What’s in it for your casual employee?

When your casual employee first comes into your company, their pay can be broken down into their rate plus casual loading. What this means is that they’re being paid an additional percentage of their salary to account for annual leave, sick leave or termination notice that they otherwise would not be receiving as a casual employee.

Casual loading is why most casual employees will still prefer to be employed casually and will likely opt to not convert to full- or part-time employment.

However, only 1-2% of people opt to convert to permanent staff, due to the trade-off of losing the aforementioned 25 percent casual loading. But will gain job security, annual leave, sick leave, any benefits your company offers, and the right to a termination package, if applicable.

What does this mean for your business?

The most obvious would be that some of your casual employees may put forward a request to become permanent staff. You will have to reply to and honour this request, as long as there are no reasonable reasons for that employee to not be a full- or part-time member — we’ll get to this in a minute.

It also means that there are new legal obligations your business needs to be aware of to avoid heavy fines.

What does your company need to do?

Thankfully, the new legal obligations are fairly simple to implement. It mostly comes down to making your casual employees aware within the first 12 months of their engagement that they have the right to request casual conversion.

You will need to:

• Provide casual employees with a copy of the conversion clause within the first 12 months of their engagement. Including this in their employment contract is an easy way to do so. Please have your legal team advise what needs to be included, based on the Award’s casual conversion requirements.

• Respond to their request in writing within 21 days, if applicable.

• That’s it. Voila!

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For more information about casual conversion, please visit the Federal Register of Legislation on the Australian Government website and consult your legal team.

If you found this blog post useful and want to stay updated with what is going on in your market, please email us at sirius@siriuspeople.com.au