Casual Conversion: Understanding Your Obligations

Many industries prefer casual employment due to its flexibility for both employees and organizations. However, casual employees lack job security and entitlements like sick leave and annual leave, unlike permanent employees.

To address this issue, the Australian Government amended the Fair Work Act 2009 (Cth) to introduce provisions related to casual conversion. Employers have an ongoing obligation to assess and make offers of casual conversion to eligible employees regularly. 

What is Casual Conversion?

Casual conversion is the process of transitioning a casual employee to a permanent employee, providing them with job security and entitlements like sick leave and annual leave. This process prevents employers from exploiting casual workers and avoiding providing job security. Casual conversion benefits both employees and employers by providing a stable and reliable workforce and reducing costs associated with high staff turnover. 

The Fair Work Act 2009 (Cth) grants casual employees the right to request casual conversion after 12 months of regular and systematic casual employment with the same employer. 

How do I offer Casual Conversion? 

To offer casual conversion, an assessment must be performed at a casual employee’s 12-month anniversary to determine their eligibility. Casuals must meet the following criteria to be offered casual conversion: 

• The employee must have worked for the same employer for at least 12 months. 
• The casual employee must have worked a regular pattern of hours on an ongoing basis for at least the last 6 months. 

The casual employee should be able to continue working these hours as a full-time or part-time employee, without significant changes. 

What do I need to do once I’ve determined one of my Employees is eligible? 

Once you have assessed your employees and determined who is eligible for casual conversion, as an employer, you must follow the process outlined below: 

Within 21 days of the employee’s 12-month anniversary, employers must make a written offer to convert the employee’s employment to permanent employment. The type of employment offered, whether it be part-time or full-time, will depend on the average number of hours worked by the employee over the past 6 months. 

To accept the offer, the casual employee must respond in writing within 21 days of receiving it. If the employee fails to respond within this timeframe, it will be assumed that they have declined the offer. 

If the employee declines the offer or has had their conversion request rejected, they cannot make another request to convert their employment for 6 months. If they make another request after 6 months, a new assessment must be conducted. 

Employers must respond to an employee’s request to convert or acceptance of an offer to convert to permanent employment within 21 days of receiving the request or acceptance. 

What happens if I do not wish to make an offer? 

If an employer decides not to offer casual conversion to an employee, they must notify the employee in writing within 21 days of their 12-month anniversary. The written notice must include the following information: 

• The employer is not making an offer of casual conversion 
• The reasons for not making an offer 

As an employer, there are only two valid reasons for not making an offer of casual conversion. First, the employee has not worked a regular pattern of hours for at least 6 months, which they could continue to work on a full or part-time basis without significant changes. Second, the employer has reasonable grounds for not making an offer, such as the position not existing in the next 12 months, the employee’s hours significantly reducing, or significant changes to the employee’s days or times of work that cannot be accommodated within their availability. Additionally, an offer cannot be made if it would not comply with a recruitment or selection process required by law, or if significant adjustments to the employee’s hours would be necessary. 

It is important for employers to understand their obligations regarding casual conversion, as it requires tracking employee anniversary dates and pattern of hours. Despite the additional effort required, casual conversion can result in a more stable and reliable workforce, leading to reduced costs associated with high staff turnover. That’s why we highly recommend regular checks in with employees to assist in managing this process. 

Does Casual Conversion apply to everyone ? 

No, Small Businesses have different obligations for Casual Conversion. Businesses with less than 15 employees are not required to offer casual conversion to their employees at the 12-month mark, but they are obliged to consider any requests for casual conversion made by their employees after this period. However, they can only decline the request based on the reasons mentioned above. 

Need help with the casual conversion process or to understand what you need to offer? Contact Now Actually or email us at contact@nowactually.com.au.