Following claims for the mandatory conversion of long-term casual employees to permanent positions by Australian union leaders, changes were finally made in a landmark decision on Wednesday. Australia’s industrial umpire the Fair Work Commission (FWC). Now, casual workers who demanded more job security can request permanent employment if they work regular hours over 12 months.

Background

The commission announced it will extend casual conversion clauses to cover 85 modern awards and minimum employment standards and enterprise agreements that govern 90 industries.

If you are interested in learning about other decisions the Fair Work Commission has recently made, you can check out or blog Ratings Season: Penalty Rates and the Fair Work Commission and Federal Court Challenge Penalty Rate Cut.

What Are The Changes?

This means, casual workers have a right (not an entitlement) to ask employers for permanent full-time or part-time jobs. The FWC outlines the right is conditional upon the casual employee working a systematic pattern of hours on an ongoing basis without significant adjustment. For example, if a casual employee worked around 36 hours for one week and then 10 the next week, the employee is not qualified to become permanent. The employee will be viewed as a genuine casual. Therefore, not all casuals will be eligible.

Attitudes Towards Potential Changes

The decision was positively received by unions and industrial groups, such as the Australian Industry Group (AI Group) who declared the ruling as a “significant win” for both employees and employers. The Australian Council of Trade Unions (ACTU) described the decision as a victory in the “first battle in the fight against the epidemic of casualisation” Also, ACTU secretary Sally McManus said the decision fills one small hole in an “epidemic of insecure work” in Australia. The Australian Bureau of Statistic estimate as of November 2015, there were 2.4 million people employed on a casual basis in Australia, making casual workers compromising 20 per cent of the total workforce. Ms McManus said a large number of Australian workers relied on insecure work with lower wages and superannuation. For this reason, she said “permanent positions allow people to plan for the future, to get loans, to budget, and to have a decent quality of living.”

For employers, AI Group Chief executive Innes Willox said employers will still retain the right to refuse requests for staff members to move from casual to permanent positions under reasonable circumstances. In fact, there are four grounds which employers can refuse a request:

  1. If a significant adjustment to the casual employee’s hours of work is required;
  2. If it is known or reasonably foreseeable the casual employee’s position will cease to exist;
  3. If there will be a significant or substantial change or reduction of a casual employee’s hours of work within the next 12 months; and
  4. On other reasonable grounds based on facts which are known or reasonably foreseeable

On the flipside, the potential changes were heavily criticised by some employer groups, particularly the retail and hospitality workers affected by penalty rates changes. The Australian Retailers Association said to the Sydney Morning Herald the decision would create extra costs and reduce flexibility for employers. Even the Australian Chamber of Commerce and Industry workplace relations deputy director Alana Matheson described the decision will place an “additional red tape” on businesses that will not recognise the key contributions of casual workers. ARA executive director Russell Zimmerman said the association fears retailers will be significantly impacted. Although the decision gives casual staff security, flexibility is compromised, which is essential to employers. Therefore, ARA is seeking more flexible part-time arrangements through the Award Review process.

Final Thoughts

Despite the varying arguments, the changes have not come into effect yet. In fact, it is only a draft ruling so submissions can still be made to the commission until August 2 before it makes a final determination.

Let us know your thoughts on the recent Fair Work Commission decision by tagging us at #lawpath or @lawpath.

Fiona Lu

Fiona is a Paralegal working in our content team which aims to provide free legal guides to facilitate public access to legal resources. With an interest in information, media, consumer and employment law, her primary focus is on how technology will affect the future of the legal industry.