Australia: A not so casual decision by the Fair Work Commission - Is your modern award on the list affected by the model casual conversion clause decision?

Overview

As a result of a decision handed down by the Fair Work Commission (Commission) on 5 July 2017, a model casual conversion clause will be inserted into 85 modern awards. A summary of the 300+ page decision is available here.

A list of the awards that the model clause will be inserted into is extracted here.

At this stage, the Commission has invited interested parties to comment on the form of model clause by 2 August 2017.

The draft model clause proposed by the Commission provides that an employee will be eligible to seek conversion if they are a ‘regular casual employee’. A ‘regular casual employee’ is a casual employee who:

• has been an employee for at least 12 months; and
• over that period, has worked a pattern of hours on an ongoing basis which, without significant adjustment, could continue to be performed in accordance with the full-time or part-time employment provisions of the relevant award. This means that the ease with which an employee can convert will depend on the terms of the part-time and full-time employee provisions in the applicable award.

An employer may refuse a request for conversion on reasonable grounds, including:

• a conversion would require a significant adjustment to the casual employee’s hours of work (i.e. the employee is not a ‘regular casual employee’); or
• it is known or reasonably foreseeable that, in the next 12 months:
  • the employee’s position will cease to exist;
  • the hours of work which the employee is required to perform will be significantly reduced; or
  • there will be a significant change in the times at which the employee’s hours of work are required to be performed which cannot be accommodated within the times the employee is available to work.

The model clause as drafted prohibits an employer from engaging / re-engaging / refusing to engage a casual employee, or reducing or varying their hours, in order to avoid any rights or obligations under the model clause.

An employer will also be required to provide all casual employees with a copy of the model casual conversion clause within 12 months of their initial engagement.

Implementation

It is unclear at this stage when the model clause will be finalised and inserted into modern awards, or whether it will have retrospective effect for the purposes of the 12 month qualifying period.

Once introduced, the potential impact of conversions under the model clause include changes to the structure and flexibility of an employer’s workforce and increased employment costs associated with having to provide certain additional benefits to employees (e.g. annual leave, personal leave, notice, etc.)

Minimum engagement periods

In the same decision, the Commission expressed the view that 34 modern awards that do not currently contain a daily minimum engagement period with respect to casual employees should be varied to include a 2 hour minimum engagement period. A list of the awards that this minimum engagement period is proposed to be inserted into is extracted here.

The Commission is inviting interested parties to provide further submissions concerning this view by 2 August 2017.

This article was prepared by Shiv Jhinku, Executive Counsel, and Lisa Soo, Solicitor, Sydney. For further information on this topic please contact: