8th August 2024 | Business
To modernise employment practices, a new pathway has been established for employees to move from casual to permanent employment status, replacing the previous “casual conversion” rights. Employees with at least six months of employment (or 12 months in a small business) can initiate this change themselves.
This new approach requires employees to request the change rather than employers to offer it. Casual employees interested in transitioning can write to their employers to express their desire to change their employment status, and employers must respond within 21 days. This change aims to make the process more efficient and centred on the employee’s needs.
Employers may decline a request to convert from casual to full-time or part-time employment on the following grounds:
- The employer believes the employee is correctly classified as a casual and does not work on a systematic basis.
- Reasonable operational reasons exist, such as significant changes required in the business’s work organization to allow the conversion.
- A change in employment status would not comply with legal recruitment or selection processes, such as those required by the Public Service Act 1999.
New Anti-Avoidance Penalties
Significant changes have been introduced to prevent employers from improperly engaging casual workers and evading legal obligations. New anti-avoidance provisions prohibit:
- Dismissing or threatening to dismiss an employee to re-engage them as a casual worker.
- Making false statements to persuade an individual to enter into a casual employment contract, such as promising financial benefits.
- Misrepresenting employment as casual when it is not.
Breaching these provisions can lead to civil penalties. Effective February 27, 2024, penalties under the Fair Work Act (FW Act) have increased by 500% for both standard and serious contraventions. Companies can now face fines of up to $469,500 for standard civil contraventions and $4,695,000 for serious ones.
Key Takeaways for HR Leaders
HR professionals must understand and implement these changes by updating their casual conversion processes to ensure a smooth transition and compliance with the new regulations. Consider the following:
- The absence of a firm advance commitment to ongoing work is key to determining casual status. Employers should consider any conduct suggesting otherwise, such as promising specific shifts, even if contracts state otherwise.
- Ensure that casual employees are paid the appropriate casual rate or loading per the relevant industrial instrument.
- Be aware that casual employees can now request conversion to permanent status. Employers should evaluate any grounds to reject such requests and be ready to provide a valid reason.
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