In a recent long and complex decision (368 pages) as part of its 4-yearly review of modern awards, the Fair Work Commission will make a number of significant changes to Casual and Part-time employment provisions in a number of awards with particular application to many of our clients' businesses.

Note - these are changes to many awards, but will not impact immediately if you are covered by an enterprise agreement. Call us on 1300 55 66 37 if you are unclear on the effect on your business.

Casual Conversion to Permanent

Casual conversion clauses already operate in some awards to require employers to offer casual employees a transition to permanent employment after a minimum set length of service, for example in the ‘Vehicle Manufacturing, Repair, Services and Retail Award 2010’.

The Commission now intends to roll out a new ‘model clause’ into the 85 awards that do not currently contain such clauses, including the Fast Food, Retail and Restaurant Industry awards.

The model clause will generally operate as follows:

1.       Within the first 12 months of service, an employer must provide a casual employee with a copy of the casual conversion clause from the award.

2.       After 12 months of service, a casual employee has the right to request in writing, conversion to permanent employment if they have worked a regular pattern of hours on an ongoing basis, which could be worked according to the fulltime or part-time employment provisions of the applicable award without significant adjustment.

3.       After consultation with the requesting employee, the request can be refused by the employer on a number of grounds, including if –

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

Therefore, it is significant part of this process that there is the right is ‘to request’ and there is scope for the employer to refuse, where the refusal is reasonable. The refusal must be in writing and provided within 21 days of the request. Any disagreements over the refusal will be handled under the award's dispute resolution procedure.

Another practical consideration is that many employees will choose to reject the opportunity to work more permanent employment, where they will lose the entitlement to the 25% casual loading in return for gaining access to annual and other forms of leave, such as personal / carer's leave.

Retail Award Overtime

A long-standing area of confusion under the Retail Award has been whether casual employees are entitled to work or be paid overtime. The Commission has decided to vary the award to make clear overtime is payable to casual employees where they work more than 38 hours in a week or more than 9 hours per day, provided they can also work 11 hours once a week without attracting overtime.

Fast Food Award Overtime

The Commission has determined that casual employees under the FFI Award will receive overtime penalty rates for working more than 11 hours a day or 38 hours in a week.

Vehicle Manufacturing, Repair, Services and Retail Award - Minimum Engagement

Casual and Part-time employees will now have a minimum daily engagement period, although it is not clear whether the minimum will be 2 or 3 hours. We will need to await final drafting to be able to confirm this.

Prior to this, there was no minimum engagement for either part-time or casual employees under relevant provisions of this award and some clients had imposed their own minimum to compensate.

Restaurant Award Part-time Provisions

The Commission has proposed that the Restaurant Industry Award’s part time provisions could be revised in line with changes also proposed to be made to the Hospitality (General) Award 2010 and the Registered and Licenced Clubs 2010 awards. The proposed changes to the latter 2 awards will feature -

  • A guarantee from both employer and employee relating to the number of hours, days of the week and periods of each day that work will be provided and the employee will be available.
  • The ability for an employee to alter their availably on 14 days written notice to their employer where there is genuine and ongoing change to their personal circumstances. Where these changes cannot be accommodated, the guaranteed hours no longer apply and both parties will need to reach a new agreement for guaranteed hours in writing.

However, the Hospitality and Clubs awards will also have a guaranteed weekly engagement of between 8 and 38 ordinary hours per week. We will need to see whether the Commission also extends this additional minimum requirement to the Restaurant Industry Award.

How can I avoid being caught off guard?

The Commission has not yet decided the exact start date for when the proposed changes will be effective, and is asking parties to the proceedings to provide drafts of the new provisions for it to consider before issuing the final clauses.

However as an employer, you can take proactive steps to get ready for the changes by reading more about the changes, examining your workforce and workplace practices and preparing a few changes to your existing processes.

How to shield your business

You can shield your businesses by -

  • Preparing to update your onboarding checklist to include supplying casual conversion clauses.
  • Creating a monthly payroll report that captures casuals working close to 12 months.
  • Reviewing your labour mix in respect to casuals and their working patterns.
  • Assessing your work rosters to avoid overtime or needing to call a casual for less than the minimum engagement period.
  • Speaking to one of our experts at ER Strategies on 1300 55 66 37.

Please note we will be producing additional resources for clients after the final drafting of the new award provisions has been completed, so stay tuned!

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