In a decision delivered on 5 July 2017,1 the Fair Work Commission (FWC) held that, subject to certain restrictions, modern awards should be varied to enable casual employees to request to convert to full-time or part-time employment after 12 months.
In this eBulletin we take a look at the FWC's decision and discuss the likely ramifications for employers.
Background
This latest decision from the FWC forms part its four-yearly review of modern awards.
Various employer and union bodies made applications to vary provisions concerning casual and part-time employment. The FWC has invited submissions about the decision until 2 August 2017. Final orders varying awards will be made after this time.
What would the decision mean for employers
Casual conversion clauses are not new. Many manufacturing awards contain such a clause. If implemented, the FWC's decision would extend this right to an additional 85 awards which currently do not have such a provision. Many of these awards cover employees in the retail and hospitality industries.
Employers would be required to inform their casual employees of their right to request a conversion within the first 12 months of their employment. Conversion would not be automatic and a casual employee would need to make a request in writing to his or her employer. Only employees who have worked a standard pattern of hours over the 12-month period would be eligible to make a request.
Employers would be able to refuse a request on reasonable business grounds. This includes where the conversion would require a significant adjustment to the casual employee's hours of work, where it is known or reasonably foreseeable that the employee's position will cease or their hours of work will be significantly reduced in the next 12 months, or on other reasonable grounds based on facts which are known or reasonably foreseeable.
Other impacts
The decision also found that casual employees employed under certain awards, including the General Retail Industry Award 2010, should receive overtime payments where they have worked more than 38 hours in a week and more than 9 hours on any day, except for one day per week where they may work 11 hours without attracting any overtime.
The FWC also found that the 34 modern awards which currently contain no minimum engagement period should be varied to include a two-hour minimum engagement period for casual employees.
Where to next?
Employers who engage causal employees should be conscious of the changes likely to occur. In particular, where a conversion request is made and an employer is unable to demonstrate that a refusal was based on reasonable business grounds, the employee may have recourse to dispute settlement provisions of the award and to the adverse action provisions in the Fair Work Act 2009 (Cth).
