Australian employers have just under a week to formally offer long-term casual workers a chance to become permanent workers, or risk facing penalties in the several thousands.
The Fair Work Ombudsman has issued a reminder to bosses that they have until 27 September to assess whether existing casuals, who have worked at least 12 months and were hired before 27 March, are eligible for permanent employment.
Laws around ‘casual conversion’ came into effect in late-March after the highly controversial Omnibus Bill passed Parliament, albeit in a significantly reduced form.
In order to give businesses a chance to adjust to the new rules, a transition period has been granted to allow time for businesses to assess whether their casuals are up for potential conversion to permanent roles.
But this transition period is coming to an end, meaning after 28 September, all employers should have already reviewed all eligible casual employees for conversion – and are continually doing so on an ongoing basis, once casuals hit the 12-month mark.
Here’s a quick outline of what you need to know, whether you’re an employer or a casual worker.
Who gets offered the chance to go permanent?
Casual employees who have worked for their employer for 12 months or more must be given the option to either go full-time or part-time permanent.
According to the Fair Work Ombudsman, employers must make a written offer to casuals who meet the following eligibility criteria:
Have worked for them for 12 months;
Have worked a regular pattern of hours for at least 6 months; and
Are able to keep working these hours as a full-time and part-time employee without major changes.
Which employers must offer this?
All employers other than small businesses will have to offer casual conversion to eligible employees.
A small business is defined by the FWO as an employer that has less than 15 workers at any given time.
But if you’re a casual employee of a small business and you’ve hit your 12-month mark, you can actually request casual conversion “any time on or after their 12 month anniversary,” FWO states.
What needs to happen?
Employers need to provide eligible casual workers with a written offer within 21 days of the worker’s 12-month anniversary.
The offer has to be either for full-time or part-time employment, depending on how many hours the casual worker has been consistently working.
Even if some casuals aren’t eligible, employers must assess them anyway and give them an explanation, in writing, on why they aren’t being offered a permanent position.
If that’s the case, the employer must state in writing that they’re not offering casual conversion and outline the reasons why. The FWO’s website has more on the only reasons why an employer wouldn’t make an offer.
What if employers don't assess casuals for conversion?
Employers will face penalties, the Fair Work Ombudsman confirmed with Yahoo Finance.
"Penalties in excess of $13,000 (for an individual) or $66,000 (for a company) can apply for a contravention of the National Employment Standards (NES), including the new casual conversion provisions," a FWO spokesperson told Yahoo Finance.
A Fair Work inspector might issue employers a compliance notice to fix any breaches of the NES.
And contravention of Australian workplace laws could see employers taken to court, according to the FWO.
How do casuals accept the offer?
If you’re a casual and your employer gives you an offer in writing to go permanent, you’ll have to provide an answer in writing within 21 days after receiving the offer.
If you accept the offer, but just verbally, nothing is actually set in stone, according to the FWO.
“If they don’t respond, their employer can assume that they’ve declined the offer.”
After the offer has been accepted, the employer then confirms the acceptance in writing, and the first day as a permanent worker begins on the “first day of the first full pay period after the employer has written to their employee” unless otherwise decided and agreed upon.
So if a casual worker’s pay cycle ends on Tuesday and the casual conversion is offered and accepted on Friday, then the following Wednesday is the first day of permanent work.
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Do casuals have to wait to get an offer?
Nope – eligible casual workers (who don’t work for a small business) can also request a conversion to become a permanent worker after 21 days of their 12-month mark.
So long as they meet the eligibility criteria outlined above, the casual workers can request a conversion.
Additionally, casual workers who think they’re eligible to become permanent can actually make a request for conversion every half a year.
Yahoo Finance has reached out to the Fair Work Ombudsman and Employsure for further comment.
What do the experts say about this?
The Australia Institute Centre for Future Work director Jim Stanford told Yahoo Finance that the concept of conversion was a “good” one that labour advocates had fought hard for, particularly in light of the pandemic – but didn’t go far enough in protecting casuals.
“The Fair Work Act changes are an inadequate implementation of that principle. The conditions under which workers can request conversion are too narrow,” Stanford said.
He pointed out that only casuals who have been with their employer for 12 months or longer are eligible, and that they need to have worked the exact same hours for six months.
“The employer can still refuse your request for conversion on ‘reasonable grounds,’ and there is no neutral arbitration process to determine whether the refusal was ‘reasonable’ or not,” Stanford added.
“Few casual workers are going to meet these criteria.”
In fact, the measures passed as part of the Omnibus Bill means Australia will “on the whole” lead to a rise in casual work, he argued, rather than a decrease.
“That will leave Australia’s labour market even more insecure than it already is.”