How the New ‘Casual Conversion Clause’ Affects You
On 1 October 2018, several Modern Awards were updated to include a ‘Casual Conversion Clause’. So, what does it mean and how does this impact your business?
If you engage casuals on a regular and ongoing basis, who work a pattern of hours without significant adjustments, that they could continue to perform as a full-time or part-time employee, employees may be eligible to request a conversion from casual to permanent employment status.
Each Modern Award will prescribe the period that the casual must demonstrate having worked a regular and ongoing pattern of hours, before falling eligible for the conversion. For example, the Mining Industry Award 2010 and the Clerks Private Sector Award 2010 stipulate a 12-month period, although the conversion clause can vary across Modern Awards.
The implementation of the casual conversion clause has created an obligation for employers to notify their casual employees, whether engaged on a regular or irregular basis, of their casual conversion rights within a set timeframe. For example, the Mining Industry Award 2010 stipulates that existing casual (employed on or before 1 October 2018) be notified of their conversion rights by 1 January 2019 with all new casuals (employed after 1 October 2018) be notified of their conversion rights within 12 months of their commencement date.
How do employees initiate the request?
Conversion requests must be made in writing by the employee to the employer. If an employer receives a conversion request, they must respond in writing within 21 days of receipt of the request. Employers then have the option to accept or reject the request to convert to permanent employment status, provided that the rejection is based on reasonable grounds.
Are there any penalties for non-compliance?
It is important to note that an employer’s failure to comply with their obligations under a Modern Award is considered a contravention of the Fair Work Act 2009 (Cth). Any failure to comply with the Fair Work Act can result in penalties, and your business may be subject to dispute proceedings, so it’s within your best interests to understand the Clause requirements.
So, what should employers do?
- Check the Modern Award(s) that apply to your casual employees to see if the casual conversion clause has been included.
- If you have not notified your existing casual staff of their conversation rights, please do so as soon as practicable and keep a record of the notification to the employee as evidence you have complied with your obligation. Remember, notification of conversion rights is required for all casuals, whether employed on a regular or irregular basis.
- For new casual employees, set a reminder to notify them of their conversion rights within the timeframe stipulated by the relevant Modern Award and keep a record of the notification to the employee as evidence you have complied with your obligation.
For assistance in meeting your obligations under the Modern Award, please contact Magnetic People on [email protected].
General Advice Warning: The information provided above is general in nature. It does not consider the specific needs of a business or an individual’s circumstances. For specific advice please contact Magnetic People Pty Ltd.
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