Reminder – Changes to Casual Conversion Process are Coming

Starting August 26, 2024, the Fair Work Act 2009 (Cth) will undergo changes affecting the conversion of casual employment to permanent positions. These changes are part of the ‘Closing Loopholes’ law and will alter employers’ responsibilities and employees’ rights.

What’s Changing?

Current law

Under the current laws, an eligible casual employee can convert to permanent employment if they have:

• Been employed for 12 months, and
• Worked a regular pattern of hours on an ongoing basis for at least the last 6 months, allowing them to continue as a full-time or part-time employee without significant adjustment.

If these criteria are met, the employer (except small business employers) must offer the employee the right to convert to permanent employment.

New law (effective August 26, 2024)

Under the new law, an eligible casual employee can notify their employer of their intention to convert to permanent if:

• They have been employed for 6 months (12 months for small business employees), and
• They no longer consider themselves a casual employee under the Fair Work Act’s definition.

This is known as the “employee choice” pathway. Employees can’t exercise this right within 6 months of a previous rejection. Importantly, employers will no longer be obligated to offer conversion after August 26, 2024 (February 26, 2025, for small businesses).

An employee’s status will only change from casual to permanent if they request it. If an employee prefers to remain casual, these amendments will not force them to become permanent.

Responding to an Employee Request

Employers will have 21 days to respond to an employee’s notification to convert their employment status. Employers must either convert the employee to full-time or part-time employment or provide reasons for not accepting the request. Employers can refuse the request on specific grounds, including:

• The employee still meets the Fair Work Act’s definition of a casual employee, or
• There are fair and reasonable operational grounds.

Fair and reasonable operational grounds

While the new laws are yet to be fully tested, examples of fair and reasonable operational grounds might include:

• Substantial changes required in how the employer’s business is organized,
• Significant impacts on the operation of the employer’s business, or
• Substantial changes to the employee’s employment conditions necessary to comply with rules, such as those in an award or agreement.

The Fair Work Commission will have the authority to mandate arbitration to determine if an employer had reasonable grounds to refuse a casual conversion request.

Need more?

Still not sure of your obligations or need further guidance on the Closing Loopholes law changes? The Workplace Relations and Legal Team are here to help and support you. Reach out on 02 6175 5900.