When are Casual Employees Entitled to Become Full Time Employees?

Since 1 October 2018, most casual employees have been entitled to request their employment status be converted to full time or part time status where certain requirements are met and an employer cannot refuse the request unless it has reasonable grounds to do so.

With over 84 Modern Awards being amended from 1 October 2018 to include an entitlement for casual employees to request conversion of their employment status, it is crucial that employers are aware of this new entitlement and in particular their obligation to make their casual employees aware of their right to request conversion of their employment status.

The below is an example of a clause that has been introduced into Modern Awards from 1 October 2018. You should consult the individual award that covers your business to determine your exact obligations in relation to casual conversion.

Sample Clause

1. A person engaged by a particular employer as a regular casual employee may request that their employment be converted to full-time or part-time employment.
2.  A regular casual employee is a casual employee who has, in the preceding period of 12 months, worked a pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to perform as a full-time employee or part-time employee under the provisions of this award.
3. A regular casual employee who has worked equivalent full-time hours over the preceding period of 12 months’ casual employment may request to have their employment converted to full-time employment.
4. A regular casual employee who has worked less than equivalent full-time hours over the preceding period of 12 months’ casual employment may request to have their employment converted to part-time employment consistent with the pattern of hours previously worked.
5. Any request under this subclause must be in writing and provided to the employer.
6. Where a regular casual employee seeks to convert to full-time or part-time employment, the employer may agree to or refuse the request, but the request may only be refused on reasonable grounds and after there has been consultation with the employee.
7. Reasonable grounds for refusal include that:
   • it would require a significant adjustment to the casual employee’s hours of work in order for the employee to be engaged as a full-time or part-time employee in accordance with the provisions of this award –that is, the casual employee is not truly a regular casual employee as defined in paragraph (b).
   • it is known or reasonably foreseeable that the regular casual employee’s position will cease to exist within the next 12 months;
   • it is known or reasonably foreseeable that the hours of work which the regular casual employee is required to perform will be significantly reduced in the next 12 months; or
   • it is known or reasonably foreseeable that there will be a significant change in the days and/or times at which the employee’s hours of work are required to be performed in the next 12 months which cannot be accommodated within the days and/or hours during which the employee is available to work.
8. For any ground of refusal to be reasonable, it must be based on facts which are known or reasonably foreseeable.
9. Where the employer refuses a regular casual employee’s request to convert, the employer must provide the casual employee with the employer’s reasons for refusal in writing within 21 days of the request being made. If the employee does not accept the employer’s refusal, this will constitute a dispute that will be dealt with under the dispute resolution procedure in the Modern Award. Under that procedure, the employee or the employer may refer the matter to the Fair Work Commission if the dispute cannot be resolved at the workplace level.
10. Where it is agreed that a casual employee will have their employment converted to full-time or part-time employment as provided for in this clause, the employer and employee must discuss and record in writing:
    • the form of employment to which the employee will convert –that is, full-time or part-time employment; and
    • if it is agreed that the employee will become a part-time employee, the matters referred to in the clause titled “Part- time Employment”.
11. The conversion will take effect from the start of the next pay cycle following such agreement being reached unless otherwise agreed.
12. Once a casual employee has converted to full-time or part-time employment, the employee may only revert to casual employment with the written agreement of the employer.
13. A casual employee must not be engaged and re-engaged (which includes a refusal to re-engage), or have their hours reduced or varied in order to avoid any right or obligation under this clause.
14. Nothing in this clause obliges a regular casual employee to convert to full-time or part-time employment, nor permits an employer to require a regular casual employee to so convert.
15. Nothing in this clause requires an employer to increase the hours of a regular casual employee seeking conversion to full-time or part-time employment.
16. An employer must provide a casual employee, whether a regular casual employee or not, with a copy of the provisions of this subclause within the first 12 months of the employee’s first engagement to perform work.
17. A casual employee’s right to request to convert is not affected if the employer fails to comply with the notice requirements in paragraph (p).

Your Obligations

As an employer of casual staff who are covered under a Modern Award you must give a copy of the relevant casual conversion clause to all of your casual staff within the first 12 months of the employee commencing work. Once the employer has provided the casual employee with the casual conversion clause the employer is not required to do anything further unless they receive a request in writing from a casual employee for conversion of their employment. In order to request a right to conversion the casual employee must:

• Have worked for the employer for a period of 12 months or more, and
• Have over the 12 months prior worked a number of hours that have across an ongoing basis formed a pattern that could continue to be performed by a full time or part time employee without the need for any significant adjustment.

An employer does have grounds to refuse the request of a casual employee to be converted to full time and/or part time status. Reasonable grounds of refusal are listed at paragraph (7) of the above sample clause.

Takeaway Message

The distinction between a casual employee and a full time and/or part-time employee has significant implications for employers in relation to correct rates of pay and an employers’ obligations in relation to accrued entitlements for full time and/or part-time employees such as annual leave, sick leave and long service leave.

Failing to uphold your obligations as an employer under a Modern Award can have serious and significant implications. If the Fair Work Ombudsman conducts an audit of your business and finds noncompliance the consequences can include:

• An infringement notice that includes incurring a monetary penalty under the Fair Work Act 2009,
• Legal proceedings being commenced against you by the Fair Work Ombudsman,
• Negative reviews by employees with the potential to lower the reputation and goodwill of your business, and
• A decrease in the morale and productivity of staff members who have been impacted by your noncompliance of the Modern Award.