Introduction of a model casual conversion clause and minimum engagement period into modern awards

WHO SHOULD READ THIS

• All non-government employers.

THINGS YOU NEED TO KNOW

• In the Modern Award Review, the Fair Work Commission has ruled in favour of the proposed model casual conversion clause and two hour minimum engagement period.

WHAT YOU NEED TO DO

• Employers should be aware of the operation of the proposed model casual conversion clause and minimum engagement period in modern awards that cover their employees.

The Fair Work Commission Full Bench (Full Bench) has ruled in favour of incorporating a model casual conversion clause into 85 modern awards and a minimum engagement period into 34 awards.

Background

In the four-yearly Modern Award Review, the Full Bench has decided that in order to meet the modern award objectives, it is necessary that modern awards contain a minimum casual engagement period and a provision by which casual employees may elect to convert to full-time or part-time employment.

In reaching its decision, the Full Bench took into account submissions of the Australian Council of Trade Unions (ACTU) who sought the introduction of a model casual conversion clause in a total of 105 modern awards to give employees the right to elect to convert to part-time or full-time employment. The ACTU proposed that for particular modern awards the casual conversion clause should go as far as deeming casual employees to be part-time or full-time employees after 12 months, unless they elected to remain casual employees. Further, the ACTU proposed a four hour minimum engagement period. Although the Full Bench did not consider the proposed ACTU clauses reasonable in their entirety, an amended version of each proposed clause was supported by the Full Bench.

The introduction of the casual conversion clause into the specified modern awards is intended to address concerns relating to permanency of employment for people working equivalent to part-time or full-time hours, but remaining as a casual employee.

Decision – casual conversion

The model casual conversion clause will be developed for 85 modern awards and will provide that a person who is engaged as a regular casual employee for a period of 12 months may request that their employment be converted from casual employment to part-time or full-time employment, subject to specified criteria and restrictions:

• the employer must provide all casual employees with a copy of the casual conversion clause within 12 months of their initial engagement
• a casual’s request to be converted to part-time or full-time employment may only be refused by the employer on reasonable grounds and after there has been consultation with the employee
• if the employer does refuse the request, it must provide the employee with written reasons within 21 days of the request being made, and
• if the employee does not accept the employer’s decision, then the matter will be dealt with under the dispute resolution procedure in the relevant modern award.

The reasonable grounds on which an employer may refuse conversion are:

• it would require a significant adjustment to the casual employee’s hours of work to accommodate them in part-time or full-time employment under the applicable modern award
• it is known or reasonably foreseeable that the casual employee’s position will cease to exist
• it is known or reasonably foreseeable that the employee’s hours will significantly change or be reduced within 12-months, or
• on other reasonable grounds based on facts which are known or reasonably known.

Certain modern awards have been excluded from the introduction of a casual conversion clause, for example the Black Coal Mining Industry Award 2010 was said not to require a casual conversion clause because the modern award makes no provision for casual employment.

Decision – minimum engagement period

While the Full Bench did not consider a four hour minimum engagement period to be reasonable for all awards, the 34 modern awards that do not currently contain a minimum engagement period are to be varied to include a two hour minimum engagement period for casual employees. The modern awards with existing minimum engagement terms will not be affected.

The modern awards to which the proposed minimum engagement period will apply are listed in Attachment G of the Full Bench decision.

Next Steps

The Fair Work Commission has provided interested parties with an opportunity to provide further written submissions in relation to the proposed model casual conversion clause and minimum engagement period. Submissions are due on 2 August 2017.

Click here to read the Full Bench decision and click here to read the summary of the decision.

For further information on any of the issues raised in this alert or for assistance in submitting a written submission before the deadline please contact us.

This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.