Summary
- Employers must have a valid reason and, in most cases, the employee’s written consent before changing a full-time employee to part-time.
- Unilaterally reducing an employee’s hours without consent may constitute a breach of contract or constructive dismissal under Australian employment law.
- Awards, enterprise agreements, and individual contracts all affect what changes are permissible and what process must be followed.
- This article explains the legal obligations on Australian businesses when transitioning employees from full-time to part-time work, under Australian employment law.
- It is produced by LegalVision, a commercial law firm that specialises in advising clients on workplace and employment matters.
Tips for Businesses
Review the employee’s contract, applicable award, and any enterprise agreement before proposing a change in hours. Document all discussions and obtain written consent. Where a genuine redundancy situation arises, follow the correct consultation process. Seek legal advice if the employee disputes the change.
An employment contract defines the rights and obligations between employer and employee. Changing a fundamental term, such as an employee’s classification from full-time to part-time, is not straightforward and carries real legal risk if handled incorrectly. This article will discuss how and when you can change an employee’s contract classification from full time to part-time.
Why Change an Employee’s Contract
You may wish to change your employee’s contract for several reasons. Perhaps there has been a downturn in trade, the role requires greater flexibility, or the business is restructuring. Whatever the reason, make sure you know your obligations as an employer.
As an employer, understand your essential employment obligations with this free LegalVision factsheet.
The General Rule
Generally, you cannot change an employee’s contract without their consent. At the very least, you must provide them with prior notice of the proposed changes. This is particularly true in cases where you are attempting to change a fundamental term of the employment contract, such as the employee’s classification from full time to part-time.
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Changing a Contract With the Employee’s Consent
Changing a fundamental term of the contract effectively creates a new contract between you and your employee. Therefore, it is up to them whether they choose to accept the new contract. If your employee consents to the change in classification from full time to part-time, the transition is simple.
As mentioned, changing an employee’s classification from full time to part-time is a change to a fundamental term of the employment agreement. This will result in a termination of the old agreement. Then, you and your employee must enter into a new agreement.
Generally, you will need to pay out your employee’s accrued entitlements (such as annual or long service leave). However, these entitlements may transfer over to the new agreement by mutual consent. As a part-time employee receives the same entitlements as a full-time employee, your employee will continue to accrue their entitlements on a pro-rata basis.
Changing a Contract Without the Employee’s Consent
Your employee might not consent to the change. So, unilaterally altering their contract may result in a breach of the employment contract and leave you open to an unfair dismissal claim.
If you want to unilaterally change the terms and conditions of the employment relationship, you may need to be prepared to make the employee’s current role redundant. In doing so, you need to ensure that the redundancy is a ‘genuine redundancy’, and that you follow the correct process. Again, this is to avoid potential unfair dismissal claims from the employee.
You can then offer the employee the option to take on a new role in a part-time capacity or redeploy them to a different role within the business. Should the employee decide not to accept this, you will be required to make a redundancy payment in addition to paying out the employee’s entitlements.
Genuine Redundancy
For a redundancy to be genuine, the role must no longer need to be performed. Additionally, you must have followed any consultation requirements contained in the employee’s award or enterprise agreement before effecting the redundancy.
Importantly, a court will not find a redundancy to have been genuine if you could have reasonably given your employee another job within the organisation.
When You Cannot Change an Employee’s Contract
Under the law, you cannot change an employee’s contract:
- for a discriminatory reason;
- because the employee has exercised a workplace right; or
- for another reason protected by law.
Other reasons protected by law include the right to be involved with an industrial association and participate in industrial action. If you change an employee’s contract for one of these reasons, you may be liable for unfair dismissal or a general protections claim.
Key Takeaways
Changing a contract from full time to part-time generally results in a termination of the original contract. Next, the parties enter into a new contract. As an employer, you can only change your employee’s contract from full time to part-time, subject to certain conditions.
If the employee does not consent to the change, you cannot change the contract. If you wish to proceed with a unilateral change to the employee’s contract, you must be prepared to offer the employee a redundancy package. Notably, the redundancy must be genuine. Otherwise, you may leave yourself open to a potential unfair dismissal claim from the employee.
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Frequently Asked Questions
An employment agreement or contract defines the rights and obligations of each party within the employment relationship. This contract will generally set out an employee’s working hours, duties, and entitlements. Likewise, it will classify an employee as full time, part-time or casual.
Changing an employee’s classification from full time to part-time is a change to a fundamental term of the employment agreement. This will result in a termination of the old agreement and effectively creates a new contract between you and your employee. Following this, it is up to them whether they choose to accept the new contract.
No. You cannot unilaterally change a fundamental contract term. If the employee refuses, you must consider a genuine redundancy process.
Both parties can mutually agree to transfer entitlements to the new agreement.
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