A new requirement to “Offer” casual conversion [if have >=15 employees]

EXPLAINED: A new requirement to “Offer” casual conversion [if have >=15 employees]

This change relates specifically to employers with 15 or more employees so if you have less than 15 employees then you just need to be ready to assess requests from your casuals.  

So this change passed by Parliament in March 2021 relates to a new entitlement being added to the National Employment Standards (NES) giving casual employees a pathway to become a permanent (full-time or part-time) employee. This is also known as ‘casual conversion’. So now the NES have 11 Standards, not 10. 

HR Tactics HR Consultants Brisbane - A new requirement to “Offer” casual conversion [if have >=15 employees]

So if you do have 15 of more employees you are not deemed under the Fair Work Act to be a small business and therefore you are now required to do 2 things before September 27th 2021

1. Proactively provide a written offer to convert to full-time or part-time permanent employment, to all casual employees who: 

  • Have been employed for a period of 12 months beginning the day the employment started.
  • During at least the last six months of that period, have worked a regular pattern of hours on an ongoing basis.
  • Could continue working those hours as a permanent employee without significant changes.
  • Hold a position that is not due to cease to exist in the next 12 months.

Where:

  • The transfer to permanent would not result in: 
    • Hours of work they’re required to perform being significantly reduced.
    • A significant change in the days on which the employee’s hours of work are required to be performed.
    • A significant change in the times at which the employee’s hours of work are required to be performed which cannot be accommodated within the days/times the employee is available to work.
    • Non-compliance with a recruitment or selection process required by or under a Commonwealth, State or Territory law?

2. Respond to the employee in writing notifying the casual employee of the decision.

What has changed? Prior to this, the only pathway for a casual to convert to permanent was for them to submit a request to convert. However now, employers with 15 or more employees must proactively offer it. So if you have less than 15 employees nothing has changed –  you just continue with the casual conversion process stipulated in your Award whereby your Casuals are able to request to convert to permanent if they believe they are eligible.  

What to do – if you have 15 or more employees 

If you have 15 or more employees, you need to take the following 5 steps before September 27th 2021.

1. Ensure you have given all current casuals the CEIS and the FW Information Statement.

2. Check that you have an onboarding procedure set in place whereby: 

  • All new casuals are provided with the CEIS and the FW Information Statement and you have evidence it has been given.
  • A reminder alert is placed in the calendar for the 11th month anniversary of a new casual, so you will be reminded to assess their eligibility to convert.

3. Pick a date when you’re going to conduct your Casual Conversion Audit (eg. Sept 1st)

4. Conduct a Casual Conversion Audit of your existing casuals to assess their eligibility against the criteria above.  

FREE RESOURCE: If you’re unsure how to conduct this audit, you can use our  “Casual Conversion Audit Checklist” on the Fair Work Compliance Resources page of our website.

Here is an overview of the steps. 

STEP 1. Prepare 3 lists (eg. on paper or an Excel  spreadsheet) titled:

  • List #1. Eligible Casuals.
  • List #2. Ineligible Casuals – completed 12 months.
  • List # 3. Casuals not completed 12 months as at September 1st 2021.

STEP 2.  Look at the start dates of every casual employee and:

  • Place the names of those who have not completed 12 months employment with your business as at September 1st 2021 on to list #3 – Casuals not completed 12 months as at September 1st 2021.
  • Place a reminder in your calendar to alert you to the 12 month anniversary of each of those casuals on List #3 – Casuals not completed 12 months as at September 1st 2021 so that you will be reminded to reassess their eligibility at that time and notify them as per STEP 5 or STEP 6. You do not need to notify these casuals that they are not yet eligible and why. No communication is required at all. 

STEP 3.  Work through each remaining casual and ascertain which are “Eligible Casuals” and are to be placed on to List #1 – Eligible Casuals and which are “Ineligible Casuals” and are to be placed on to List #2 – Ineligible Casuals – completed 12 months.

“Eligible Casuals” are those who meet ALL of the following eligibility criteria: 

  • Have been employed for a period of 12 months beginning the day the employment started.
  • During at least the last six months of that period, have worked a regular pattern of hours on an ongoing basis.
  • Could continue working those hours as a permanent employee without significant changes.
  • Hold a position that is not due to cease to exist in the next 12 months.
  • Transferring them to permanent would not result in (non-exhaustive list): 
    • Hours of work they’re required to perform being significantly reduced.
    • A significant change in the times at which the employee’s hours of work are required to be performed which cannot be accommodated within the days/times the employee is available to work.
    • The employer having to make a significant adjustment to the employee’s work hours for them to be employed full-time or part-time.
    • Non-compliance with a recruitment or selection process required by or under a commonwealth, state or territory law.

STEP 4.  For those on List #1 – Eligible Casuals: 

  • Provide them a written offer to convert to full-time or part-time (permanent) employment (within 21 days) advising them:
    • They must respond to the offer in writing within 21 days after receiving the offer advising whether they accept or decline the offer.
    • That If they don’t respond within that timeframe, then you the employer can assume that they’ve declined the offer. 

STEP 5.  For those on List #2 – Ineligible Casuals – completed 12 months –

  • Consult/discuss with the employee that: 
    • Their employer has been exempted from the requirement to offer them the opportunity to convert to permanent, and on which of the criteria that exemption is based.  
    • That they will be notified in writing.
  • Provide notification in writing (within 21 days) advising them: 
    • That their employer has been exempted from the requirement to offer the opportunity to convert to permanent.
    • On which of the criteria that exemption is based.

STEP 6.  When you receive an acceptance in writing you must within 21 days:

  • Discuss the new permanent arrangements with the employee – the hours of work etc.
  • Convert them to permanent in your payroll system to commence within the next full pay period (or on another date as agreed between the employee and the employer).
  • Provide them with a Permanent Part Time/Full Time Employment Contract (or Letter of Appointment for businesses with an Enterprise Agreement).

When you receive a declined offer in writing you must within 21 days:

– Confirm in writing to them that you’ve received their decision to not convert.

When you don’t receive anything in writing you must within 21 days:

– Confirm in writing to them that as you have not received their response, you have assumed that they’ve declined the offer. 

5. Be ready to receive requests to convert from your casuals. On receiving a request you will need to work through a series of 4 steps I’m about to talk you through and you’ll need to take these steps within 21 days. These steps cover:

  • Assessing their eligibility.
  • Consultation.
  • Responding to their request.
  • Conversion if they are eligible.

FREE RESOURCE: If you are unsure how to manage requests for casual conversion you can download our step by step “Casual Conversion Request Checklist” on our Fair Work Compliance Resources Page.

But I’ll talk you through the 4 steps here:

STEP 1.  

– Use the eligibility criteria to ascertain if this casual is an “Eligible Casual” or an “Ineligible Casual”

“Eligible Casuals” are those who meet ALL of the following eligibility criteria:

  • Have been employed for a period of 12 months beginning the day the employment started.
  • During at least the last six months of that period, have worked a regular pattern of hours on an ongoing basis.
  • Could continue working those hours as a permanent employee without significant changes.
  • Hold a position that is not due to cease to exist in the next 12 months.
  • Transferring them to permanent would not result in: 
    • Hours of work they’re required to perform being significantly reduced.
    • A significant change in the days on which the employee’s hours of work are required to be performed.
    • A significant change in the times at which the employee’s hours of work are required to be performed which cannot be accommodated within the days/times the employee is available to work.
    • Non-compliance with a recruitment or selection process required by or under a commonwealth, state or territory law.

– If the casual is deemed eligible based on the above, then move on to step 2.

– If the casual is NOT deemed eligible based on the above, then move on to step 4.

STEP 2.  

For those Eligible Casuals you must do the following within 21 days:

– Ask yourself whether in the last 6 months:

  • They’ve refused an offer from you to convert to permanent employment.
  • They’ve been told by you in writing that you won’t be making an offer of casual conversion because there was a reasonable ground not to make the offer.
  • You have refused another request for casual conversion because there was a reasonable ground to refuse the request.

If the answer to ALL the above is “NO” then they are still eligible so move on to step 3. 

If the answer to ANY the above is “YES” then they are not eligible so move on to step 4.

STEP 3.

– Consult/discuss with the employee that:

  • You have assessed them as eligible and will be accepting their request to convert to permanent.
  • They will receive notification of this acceptance in writing with a Part Time/Full Time Employment Contract. 

– Convert them to permanent in your payroll system.

– Provide them with:

  • Official written acceptance of their request to convert.
  • A permanent part time/full time employment contract (or Letter of Appointment for businesses with an Enterprise Agreement).

STEP 4. For those Ineligible Casuals you must do the following within 21 days:

– Consult/discuss with the employee that: 

  • Their request to convert does not appear to meet the eligibility criteria and therefore their employer is exempted from the requirement to accept their request to convert, and on which of the criteria that exemption is based.

– Provide notification in writing advising them: 

  • That their employer has been exempted from the requirement to accept their request to convert to permanent.
  • On which of the criteria that exemption is based.

What to do – if you have less than 15 employees

Because small business employers are exempt from having to proactively “offer” the option to convert to their eligible casual employees, you are only required to advise your eligible casuals that they have the right to request to convert if they are “eligible casuals” by providing them with the CEIS.  

So if you have less than 15 employees there are 3 things you need to do as soon as possible after March 27th 2021 is:

1. Ensure you have given all casuals the CEIS and the FW information statement.

2. Check that you have an onboarding procedure set in place whereby all new casuals are provided with the CEIS and the FW Information Statement and you have evidence it has been given.

3. Be ready to receive requests to convert from your casuals. On receiving a request you will need to work through a series of steps within 21 days involving:

  • Assessing their eligibility,  
  • Consultation  
  • Responding to their request
  • Conversion if they are eligible

Again, if you are unsure how to manage requests for casual conversion you can download our step by step “Casual Conversion Request Checklist” on our Fair Work Compliance Resources Page of the HR Tactics website.

When is an employee ineligible to make a request

An employee isn’t eligible to make a request if, in the last 6 months:

  • They’ve refused an offer from you to convert to permanent employment.
  • They’ve been told by you in writing that you won’t be making an offer of casual conversion because there was a reasonable ground not to make the offer.
  • You have refused another request for casual conversion because there was a reasonable ground to refuse the request.

How often can an employee make a request for conversion?

Casual employees who believe they’re eligible to become a permanent employee can make a request for conversion every 6 months. 

Sometimes employees can still make a request even if their employer has told them in the last 6 months that they won’t be making an offer of casual conversion.  

Employees can only do this if they didn’t get an offer because they hadn’t worked a regular pattern of work in the 6 months before their earlier request, but they now have.

VERY IMPORTANT – Protections at work 

It’s really critical that you remember here that an employer can’t reduce or change an employee’s hours of work, or terminate their employment, to avoid having to offer or accept a request for casual conversion.

Why is that? Because casual employees are also protected against: 

1. Adverse action by an employer because they have a workplace right to convert to permanent employment. 

Casual employees may also be protected against: 

2. Unfair dismissal by an employer if they are regular and systematic casual employees.  

So, what does this mean? It means that if you go ahead and deliberately change an employee’s roster so they don’t meet the eligibility requirements, the casual employee may have grounds to lodge an adverse action claim or an unfair dismissal claim against you. 

HR Tactics – HR Consultants Brisbane – Outsourced HR

This information was provided with the intention of helping you find more clarity, confidence and peace of mind as you navigate your own journey as an employer. I would love to hear your thoughts on this, and if you think someone else would enjoy it please feel free to share it on.


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About The Author
Jackie Strachan

Jackie Strachan

Jackie’s passion for creating better Human Resources outcomes stems from over 20 years’ experience in the field and a drive for finding innovative solutions.
Her HR career has seen her hold both operational and strategic HR management roles across a vast array of industry sectors including retail, financial services, child protection, professional services, dental, state emergency services, Department of Justice, agency recruitment and IT.
Combining her experience in each specialised area of Human Resources (such as learning & development, recruitment, WHS and employee relations etc), Jackie leads HR Tactics with an industry-respected foundation of knowledge.