Casual Conversion Clause changes

Key details

• Modern Awards that apply to the construction industry currently contain a clause that permits some casual employees to convert to full time or part time employment (Casual Conversion Clause).
• Under the current Casual Conversion Clause, a casual employee who works regular and systematic hours for 6 months has the right to elect to have their employment converted to full time or part time if their employment is to continue beyond the 6 month period.
• Amendments to the Fair Work Act mean that the current Modern Award clause is being replaced by a new Casual Conversion Clause which imposes a new obligation on employers with more than 15 employees.

Key date – 27 September 2021

As a result of the adoption of a new Casual Conversion Clause, employers with more than 15 employees must, by 27 September 2021, conduct an assessment of any casual employee employed before 27 March 2021 in order to determine their eligibility for casual conversion. 

If a casual employee is eligible to convert to full time or part time employment you must provide that offer within 21 days.

If a casual employee is not eligible to be offered conversion to full time or part time employment, the employee must be notified of this in writing by 27 September 2021.

Casual Conversion entitlement 

An employee may be eligible for conversion from casual to full time or part time employment if the employee:

• Has been employed for 12 months 
• Has worked a regular pattern of hours on an ongoing basis for at least the past 6 months; and 
• Will be able to continue to work these hours as a full time or part time employee without significant changes. 

Whether an employee is entitled to convert to full time or part time employment is dependent on the hours worked over the last 6 months. For example, an employee who has worked 38 hours per week for the last 6 months as a casual would be eligible for full time employment whilst an employee who has worked 15 hours per week for the last 6 months may be eligible for part time employment. 

Deadline for Casual Conversion

For all employees employed before 27 March 2021

There are three important deadlines which employers must comply with:

27 September 2021 - Assessment of Current Casuals

By 27 September 2021, employers (other than small businesses who have less than 15 employees) must review any current casual employees who were employed before 27 March 2021 to determine who is eligible for casual conversion. 

Within 21 days of the assessment - Offer for Casual Conversion

Within 21 days of completing the assessment (and therefore no later than 18 October 2021), employers must provide written offers to any employee who is being offered casual conversion. 

27 September 2021 - Notification that Casual Conversion isn't being offered  

If an eligible casual employee will not be offered to convert to permanent employment, employers are required to provide written notice of this and the reasons why an offer is not being made before 27 September 2021. 

Reasons why you may not need to provide casual employees with conversion

An employer can refuse to offer a casual employee conversion to full time or part time employment on the following grounds:

• The casual employee has not worked a regular patter of hours over the last 6 months 
• Significant changes would be required to allow the employee to continue working as a full time or part time employee 
• The business has reasonable grounds to refuse, including that in the next 12 months:
  • The employees position will no longer exist
  • It is expected that there will be a significant reduction in hours required from the employee 
  • The business is unable to accommodate changes to days or times of work which would occur during casual conversion.

Employee response 

Employees are required to respond to an offer within 21 days. Failure to respond on time will be deemed to be a rejection of the offer. Accordingly, it is important that employers have a clear record of the date and time that the offer was provided to the employee. 

Casual Conversion – All other employees 

After 27 September 2021, employers will still be obligated to assess their casual employees and offer casual conversion. An employee will be eligible once employed for 12 months and on the same grounds discussed above. 

Additionally, an eligible employee can make a request to convert to permanent employment from 21 days after their 12 month anniversary and may make a request to convert every 6 months.  

However, employees are not eligible to make a request if within the past 6 months they have either rejected an offer for casual conversion or the employer has had reasonable grounds to reject or not make the offer. 

I am a small business with less than 15 employees – what do I need to do?

An eligible casual employee working for a small business employer can request to convert to full time or part time employment at any time on or after their 12 month anniversary. 

Existing casuals working for a small business employer before 27 March 2021 can also make a request to convert at any time from 27 March 2021 if they are eligible. 

To respond to an employee’s request to convert, employers need to write to them within 21 days and tell the employee if they have or haven’t accepted their request. 

If the employer refuses the request, they have to tell the employee their reasons why in their written response. Employers can’t refuse a request unless they have consulted the employee and have reasonable grounds to refuse the request.

Casual Employment Information Statement (CEIS)

Small business employers need to give their existing casual employees a copy of the CEIS as soon as possible after 27 March 2021. Other employers have to give their existing casual employees a copy of the CEIS as soon as possible after 27 September 2021.

Download the Casual Employment Information Statement. 

To find out more, contact HIA's Contracts and Compliance team

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