Fair Work’s casual conversion decision: an overview, including steps for businesses

Employment clause

Casual workers will be given the right to convert to part-time or full-time employment, and receive new minimum engagement periods, the Fair Work Commission announced earlier this month.

The Commission has decided to give employees across most industries and occupations the right to request permanent employment status after 12 months of regular and systematic employment. The decision was well received by the union movement but equivalently criticised by employer groups.

However, the right of long-term casuals to convert to permanent and minimum engagement periods isn’t totally novel. Similar provisions have been in most Awards for years. What the Commission has done, is extend the same rights to all the other Awards — the documents that set down minimum employment standards and pay rates in most industries.

While the specifics of the decision are yet to be confirmed, the decision means most casual workers now have the right to request permanent employment if they work regular and systematic hours over a full year. It does not mean that they are entitled to be converted to a permanent position as there are explicit conditions that must be met.

What are the proposed conditions?

  • a qualifying period of 12 consecutive calendar months is met
  • the casual employee must have worked a pattern of hours on an ongoing basis over the 12 month period which could continue to be worked on a full-time or part-time basis without significant adjustment
  • the employer must provide all casual employees with a copy of the casual conversion clause within the first 12 months after their initial engagement

Conversion may be refused by the employer on reasonable grounds if: 

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

What are the new minimum engagement periods?

Controversy around the minimum engagement periods continues with the Commission also proposing in the same decision, new standards for Awards to require a daily minimum engagement period of two hours for casual and part-time employees. Minimum engagement periods are also not a novel decision. They were introduced and exist in some Awards and were intended to protect employees by ensuring that the time worked is worth the travel time and costs.

What should employers do now?

These changes aren’t finalised, so they don’t apply yet. The Commission is giving interested parties until 2 August 2017 to make further submissions about the terms of the proposed casual conversion clause and further hearings will likely be held prior to the Commission making final determination.

Now is the time to review your current use of casuals – not just how many casual employees you engage, but why and how often you engage them. If you have casual employees working systematic, or regular hours for more than a six-month period, start considering the implications for your business.


About the author

Josh Vikis is the Head of Advice at Australia’s leading workplace specialists Employsure. Josh has a wide range of employment relations experience. Prior to joining Employsure, he was a union representative and majored in Human Resources and Employment Relations at the University of Newcastle.