Many industries prefer casual employment due to its flexibility for both employees and organizations. However, casual employees lack job security and entitlements like sick leave and annual leave, unlike permanent employees.
To address this issue, the Australian Government amended the Fair Work Act 2009 (Cth) to introduce provisions related to casual conversion. Employers have an ongoing obligation to assess and make offers of casual conversion to eligible employees regularly.
What is Casual Conversion?
Casual Conversion is the process of transitioning a casual employee to a permanent employee, providing them with job security and entitlements like sick leave and annual leave.
This process prevents employers from exploiting casual workers and avoiding providing job security.
What are the benefits of Casual Conversion?
Casual conversion benefits both employees and employers by providing a stable and reliable workforce and reducing costs associated with high staff turnover.
What are the criteria for Casual Conversion?
Casuals must meet the following criteria to be offered Casual Conversion:
- The employee must have worked for the same employer for at least 12 months
- The casual employee must have worked a regular pattern of hours on an ongoing basis for at least the last 6 months
- Entails an option or entitlement for multiple renewals or extensions, irrespective of the duration of the first contract whether it be for a short period of time or a longer period of time.
The casual employee should be able to continue working these hours as a full-time or part-time employee, without significant changes
What do I need to do once an Employee is determined eligible?
Once you have assessed your employees and determined who is eligible for Casual Conversion, as an employer, you must follow the processes outlined below:
- Making a written offer: Within 21 days of the employee’s 12-month anniversary, employers must make a written offer to convert the employee to permanent employment.
- Accepting the offer: To accept the offer, the casual employee must respond in writing within 21 days of receiving it.
- Declining the offer: If the employee declines the offer or has had their conversion request rejected, they cannot make another request to convert their employment for 6 months. If they make another request after 6 months, a new assessment must be conducted.
- Responding to requests: Employers must respond to an employee’s request to convert or acceptance of an offer to convert to permanent employment within 21 days of receiving
What happens if I do not wish to make an offer?
If an employer decides not to offer casual conversion to an employee, they must notify the employee in writing within 21 days of their 12-month anniversary. The written notice must include the following information:
- The employer is not making an offer of casual conversion
- The reasons for not making an offer
As an employer, there are only two valid reasons for not making an offer of casual conversion:
- First, the employee has not worked a regular pattern of hours for at least 6 months, which they could continue to work on a full or part-time basis without significant changes.
- Second, the employer has reasonable grounds for not making an offer, such as the position not existing in the next 12 months, the employee’s hours significantly reducing, or significant changes to the employee’s days or times of work that cannot be accommodated within their availability. Additionally, an offer cannot be made if it would not comply with a recruitment or selection process required by law, or if significant adjustments to the employee’s hours would be necessary.
It is important for employers to understand their obligations regarding casual conversion, as it requires tracking employee anniversary dates and patterns of hours. Despite the additional effort required, casual conversion can result in a more stable and reliable workforce, leading to reduced costs associated with high staff turnover. That’s why we highly recommend regular checks-in with employees to assist in managing this process.
Does Casual Conversion apply to everyone?
No, Small Businesses have different obligations for Casual Conversion. The exceptions are outlined below:
- Businesses with less than 15 employees are not required to offer Casual Conversion to their employees at the 12-month mark
- However, Employers are obliged to consider any requests for Casual Conversion made by employees after this period