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Casual to Permanent Employment Conversion – What you Need to Know

Employment Law

Some major changes are taking place regarding the status of casual employees which businesses need to be on top of.

Casuals get a higher hourly rate for their work, but in exchange for this, they do not have any personal (sick) leave, notice or redundancy entitlements. Their casual status renders their position vulnerable to termination, as in most cases they do not have unfair dismissal rights.

Sometimes a person employed as a casual ends up working similar hours as permanent staff, often doing much the same duties, and this arrangement can carry on for many months, and in some cases even years! There are many casuals who originally preferred casual employment, but over time have come to love their job, and would prefer the security of a permanent position, even if their hourly rate is less.

As a result of a decision of the Fair Work Commission in late 2018, many Awards have now been updated to provide casual employees the right to request conversion from casual to permanent employment after 12 months continuous service. There is also a federal Bill likely to become law very soon, extending these principles to all employees and businesses.

Some of the key principles to be aware of include:

*to qualify, casual employees need to have regular hours and the reasonable expectation of ongoing work.

*under the Award changes, the onus is with the employees to request the change, but once the Bill becomes law, employers will be obligated to offer conversion to suitable employees after 12 months service as a casual

*the employer can refuse the request on reasonable business grounds, but must consult to discuss options before refusing (eg they might offer a fixed term contract if they are confident there may be work for a certain period of time).

Sometimes casuals argue that their casual status is a legal fiction, and they seek retrospective recognition of having been in truth a permanent employee at all times in the past. These cases are messy, and there are many issues to consider. A key issue is usually the regularity of hours over an extended period of time. Another legislative change which is relevant to these situations is that if an employee is successful in arguing they were in truth a permanent employee in the past, the employer is allowed to count the casual loadings paid to the employee when calculating unpaid entitlements to the employee.

If you need any advice regarding the handling of your casual staff, please get in touch with a member of our employment team.