Amendments by the Federal Government on the 22 March, 2021, to the Fair Work Act 2009 (Cth), have significant implications for employers of casual employees in Australia. This article addresses one of the major amendments to the Act that codifies requirements of conversion from casual employment to permanent employment (‘casual conversion’).

What Employers Need To Know

Employers, excluding small business employers, are now required to provide a written offer to a casual employee to become a permanent employee within 21 days of the employee's 12-month anniversary of employment, if that employee:

1. Has been employed by the employer for at least 12 months;

2. Has worked a regular pattern of hours on an ongoing and continual basis for at least 6 months; and

3. Is able to continue working the regular pattern of hours as a full-time or part-time employee without significant changes.

This written offer by the employer must be an offer of full-time permanent employment if the employee has worked at least the last 6 months at full-time hours, or otherwise, an offer of part-time permanent employment, consistent with the regular pattern of hours the employee worked for at least the last 6 months, if less than full-time hours. If this employee does not respond to the offer in writing within 21 days after the offer is received, the employer is entitled to assume the offer has been declined.

Employers, excluding small business employers, deciding not to offer casual conversion to eligible casual employees are required to write to that employee within 21 days of the employee's 12-month anniversary of employment, informing them that they will not be making an offer of casual conversion and the reasons for not making the offer. Only two reasons may be given for an employer in not making the offer, (a) the casual employee has not worked a regular pattern of hours, on an ongoing basis for at least the last 6 months, which they could continue working without significant changes and (b) the business has reasonable grounds for not making the offer.

Eligible casual employees (other than those employed by a small business employer) can request conversion to permanent employment from 21 days after their 12-month employment anniversary. An eligible casual employee is not permitted to make a request if, in the last 6 months (a) they have refused an offer from their employer of conversion, (b) the employer has told them in writing, based on reasonable grounds, that the employer will not be making an offer of conversion, and (c) the employer, based on reasonable grounds, has already refused another request of conversion.

Reasonable Grounds For Not Making An Offer

There are some reasonable grounds by which an employer may not be required to make an offer of conversion, or deny a request by the eligible casual employee of conversion and these grounds must be based on facts that are known or reasonably foreseeable. Reasonable grounds include:

 1. In the next 12 months, the employee's position will not exist, or hours of work will significantly reduce, or days or times or work will significantly change and  cannot be accommodated with the employee's available days and times for work;

2. The employer would be required to make significant adjustments to the employee's work hours for them to be employed part-time or full-time; and

3. Making an offer would not comply with recruitment processes enshrined by Commonwealth, State or Territory laws.

Employers (excluding small business employers) have a 6-month transition period to begin complying with the requirements of casual conversion reforms. By 27 September 2021, employers must have assessed and made written offers to eligible casual employees for casual conversion. Equally, eligible casual employees cannot make a request for conversion until 27 September 2021.

The casual conversion reforms apply differently to small business employers.  A Small business employer is an employer who employs less than 15 employees (by head count) at the relevant time. Small business employers do not have to offer casual conversion. Eligible casual employees of small business employers can request conversion any time on or after their 12-month casual employment anniversary, and any time after 27 March 2021. In responding to an offer of conversion, small business employers are under the same requirements as standard employers. 

Under New Reforms 

Under the reforms, employers should now start contemplating which of their employees will require conversion offers by 27 September 2021. Employers should also ensure that have provided new casual employees the Casual Employment Information Statement published by the Fair Work Ombudsman (‘CEIS’). With regards to existing casual employees, small business employers are required to provide the CEIS to the employee as soon as possible after 27 March 2021, and standard employers are required to provide the CEIS to the employee as soon as possible after 27 September 2021.

Navigating your way through all the requirements as an employer can be difficult, and non compliance can lead to significant penalties against your company and also you as a director.  To assist you through this process, please feel free to contact us here at Longton Legal.  Our experienced solicitors can help your business ensure you are compliant and in turn minimize any future risks and liabilities.

*Disclaimer：This is intended as general information only and not to be construed as legal advice. The above information is subject to changes over time. You should always seek professional advice before taking any course of action.*