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Casual conversion creates a right for eligible casual employees to request conversion to permanent part-time or full-time employment. Understanding who is eligible and circumstances where you can reasonably refuse the request is important to comply with your legal obligations. It may also help you assess where it is viable to convert a casual employee to permanent employment. This article explains:

  • the difference between permanent and casual employment;
  • who is eligible to request casual conversion; and 
  • when you can reasonably refuse such a request.

The article also touches on associated risks for casual employees who are not eligible or do not exercise their right.

What Is Casual Employment and Permanent Employment?

Casual employment is irregular ad-hoc employment where there is no ongoing work expectation. The employment starts and ends at the start and end of each engagement. The employer can elect to offer shifts on a particular day or days, and the employee has no obligation to accept these shifts. The courts have generally been reluctant to define a “casual” employee and have instead focused on the manner of engagement for casual employees. Here, there should be no certainty about the period over which the employer will offer employment. This informality, uncertainty, and irregularity of the engagement gives it the characteristic of being casual.

Permanent employees can be part-time or full-time. They have regular and systematic employment with an ongoing expectation of work. The parties agree to a minimum number of hours each week and the hours are generally worked on the same days.

For example, Monday to Friday 9 am to 5 pm for a full-time employee. Or, Monday and Tuesday 9 am to 12 pm for a part-time employee.

Which Casual Employees Can Convert?

Not all employees have a right to request casual conversion; only employees who are covered by a modern award have an express right to make a request. If an employee is award-free, they do not have a right to request casual conversion. However, even if they do not have an express right, you should consider any associated risks (as set out below).

Under modern awards, an employee must be a ‘regular casual employee’ to be eligible to request casual conversion. Generally, a ‘regular casual employee’ is an employee who has in the preceding period of 12 months (or six months depending on the award) worked a pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to perform as a full- or part-time employee. Note that this definition may differ depending on the applicable modern award.

This means that employees:

  • with less than 12 months (or six months) of continuous service are not eligible to request casual conversion;
  • who have worked a pattern of not regular and systematic hours are not eligible to request casual conversion. For example, if they have worked a few days each month on and off; and
  • employees who worked irregular and ad hoc hours for seven months and regular and systematic hours for the next five months may not be eligible to request casual conversion for a further seven months.

What Is the Process For Casual Employees To Request Conversion?

Eligible employees must make a request in writing. Whether they can request to convert to full-time or part-time will depend on whether they have worked equivalent full-time or part-time hours over the past 12 (or six) months.

What Is the Right To Request? What Are Reasonable Grounds for Refusal?

It is important to highlight that the right to request casual conversion is not a right to casual conversion. Instead, it is only a right to request it. Once an eligible employee has made the request complying with the required process, the employer must review and respond to the request (in writing and with reasons) within 21 days.

The employer must accept the request unless it has reasonable grounds to refuse. Reasonable grounds to refuse include but are not limited to:

  • if the conversion would require a significant adjustment to the employee’s hours of work (that is the employee is not truly a ‘regular casual employee’ as defined above, i.e. the employee was not in fact truly eligible);
  • it is known, or reasonably foreseeable, the regular casual position will cease to exist in the next 12 months;
  • it is reasonably foreseeable that the hours of work that are regularly required to be performed by the regular casual will be significantly reduced in the next 12 months; or
  • when it is known or reasonably foreseeable that there will be a significant change in the days or times the employee needs to work in the next 12 months which cannot be accommodated within the days or times the employee is available.

What if My Casual Employees Do Not Have the Right or Does Not Request Casual Conversion?

Even if an employee has not requested casual conversion (including in circumstances where they do not have a right to), you should consider whether your casual employees are in fact true casuals.

This issue has been recently considered in the Rossato decision. The Rossato case highlighted risks associated with engaging employees as casuals when they are, in reality, permanent employees. Incorrectly classified casual employees may claim permanent entitlements which they have missed out on, such as:

  • annual leave; and 
  • personal/carer’s leave.

This could create an underpayment liability.

On that basis, it is important to regularly review the true nature of casual employees’ employment. Where the employee is working regular and systematic hours, you may consider offering permanent employment. This is even if they do not have or have not exercised an express right to request casual conversion.

Key Takeaways

Casual employees who meet the definition of ‘regular casual employees’ may elect to make a written request to convert to part- or full-time hours. You have 21 days to respond in writing with your reasons. This includes refusing the request on reasonable grounds. Such grounds include if you project the role will exist or have a significant reduction or change in the hours within the next 12 months. Aside from the express right to casual convection, employers should consider whether casual employees are, in fact, permanent. If they are, you could face the risk of underpayment. If you have any questions about your employees wishing to convert from casual to permanent employment, contact LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.

FAQs

What is casual employment?

Casual employment is irregular ad-hoc employment where there is no ongoing expectation of work. The employment starts and ends at the start and end of each engagement. 

What is permanent employment?

Permanent employees can be part-time or full-time. They have regular and systematic employment with an ongoing expectation of work. The parties agree to a minimum number of hours each week and the hours are generally worked on the same days.

What is the process to request casual conversion?

Eligible employees must make a request in writing. Whether they request to convert to full-time or part-time will depend on whether they have worked equivalent full-time or part-time hours over the past 12 (or six) months.

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