Casual Employees: Right To Become A Permanent Employee

How new changes to the rights of casual employees will affect businesses from this year.

Eligible Casual Employees

Since March 2021 the Government has updated the National Employment Standards to include ‘casual conversion’. These new changes are found under Division 4A of the Fair Work Act 2009 (CTH). Casual conversion is when an employee has worked for the same employer for 12 months. After this point, the employee can request to become a full or part-time employee. Depending on the business, they may need to offer the employee the option to become either a full or part-time employee. The option to be either full or part-time depends upon the hours worked by the employee.

Casual Employees of Small Businesses

There is an exception for small businesses. A small business does not have to offer a casual employee the right to become a full or part-time employee. However, if the employee requests to become a permanent employee then the business must respond. The small business can refuse if any of the reasonable grounds below apply.

Standard Employers

The requirement for standard employers is that they must offer the full time/part-time option. This is the case if the employee has worked there for 12 months, and has worked a regular set of hours for at least 6 months. Furthermore, the employee has to be able to work those same hours as a full or part-time employee without a significant change.

The employer can refuse to make an offer if the employee has not worked a regular set of hours for at least 6 months. However, if the situation changes then the employer will need to make an offer. The other reason not to make an offer is due to reasonable grounds.  Importantly, any refusal needs to be provided in writing. Additionally, the employer must provide it within 21 days of the employees having worked there for 12 months.

Reasonable Grounds to Refuse

As an employer, the reasons to refuse casual conversion as set out are limited. Currently, the legislation has provided a non-exhaustive list of reasons:

1. Employee’s position will cease to exist in the next 12 months
2. Hours of work for the employee will be reduced
3. A significant change in either or both the hours and days of the employee