2.1
Casual work arrangements form an important element of the Australian labour market and provide a number of benefits for both employees and employers.
2.2
Many individuals choose casual work as a genuine and fulfilling employment choice that best suits their life priorities. As the Hon. Kelly O'Dwyer MP, Minister for Jobs and Industrial Relations, noted when introducing the Fair Work Amendment (Right to Request Casual Conversion) Bill 2019 (the bill):
Working as a casual enables people to balance work with other priorities. This includes flexibility for those with caring responsibilities for children, parents, or those with disabilities; helping mature age people to stay in work while transitioning to retirement; and enabling students to have a job while studying.
2.3
Casual workers are entitled to a higher hourly pay rate than equivalent full‑time or part-time employees (usually a 25 per cent loading). The casual loading is a replacement for permanent employee entitlements such as paid annual leave, paid personal/carer's leave, and notice of termination and redundancy pay. This casual loading is often an important consideration for some employees choosing casual employment.
2.4
Casual employment also provides employers with flexibility to manage their workforce. It allows businesses, in particular small and medium enterprises, to better manage peaks, troughs and seasonality factors in order to more effectively compete in contemporary economic markets. For example, a business may need the flexibility to casually employ extra staff during holiday periods or harvest times.
2.5
The number of casual employees as a proportion of all employees has remained relatively stable over the past two decades. In November 2018, 25.3 per cent of Australian employees were casual employees, equating to approximately 2.7 million workers.
2.6
The bill seeks to amend the Fair Work Act 2009 (Fair Work Act) to insert a new right for eligible employees to request to convert to full-time or part-time employment into the National Employment Standards (NES). The right is intended to ensure that all employees in the national system have access to a right to request casual conversion.
2.7
The explanatory memorandum outlined the current arrangements:
There is currently nothing preventing an employee from requesting that their employer convert their employment to a different type, and nothing preventing an employer from agreeing to such a request. However, many employees do not currently have access to a protected right providing a formal pathway to request conversion. The amendments in the bill would provide eligible employees with a clear conversion pathway.
2.8
The new NES right the bill seeks to implement is in line with a model casual conversion clause developed by the Fair Work Commission (the Commission).
2.9
On 5 July 2017 the Commission determined to insert a casual conversion clause into 85 modern awards to allow eligible casual employees to request conversion to full-time or part-time employment. This model clause took effect on 1 October 2018.
2.10
The Commission's decision applies to employees whose terms and conditions of employment are set by one of the 85 awards. Additionally, another 27 modern awards already contain casual conversion terms specifically tailored by the Commission to respond to the needs of each of those particular industries. However, a significant number of employees in the national system do not have access to a safety net right to request conversion.
2.11
The bill seeks to fill this gap and provide a protected right to request conversion to:
employees who are covered by a modern award that does not contain a right to request casual conversion;
employees to whom an enterprise agreement applies and who are either:
covered by a modern award that does not contain a right to request casual conversion; or
not covered by a modern award at all; and
employees who are award and agreement free.
2.12
The bill provides eligible employees with a right to request to convert to
full-time or part-time employment. An employee is deemed to be eligible if:
they have been designated as a casual employee by the employer for the purpose of any fair work instrument that applies to them or their contract of employment; and
in the previous 12 months before giving the request to the employer, worked a regular pattern of hours on an ongoing basis, which, without significant adjustment, they could continue to work as a full-time or part‑time employee.
2.13
The bill requires that after an eligible employee lodges a request in writing, the employer is required to provide a written response within 21 days. If the request is refused, the written response must include details on the reasons for refusal. Additionally, an employer would not be permitted to refuse the request unless the employer had consulted the employee, and there were 'reasonable grounds' for the refusal based on facts that were known or reasonably foreseeable at the time of the refusal.
2.14
The bill also seeks to:
ensure that all employees in the national system would have access to a dispute resolution mechanism to resolve disputes that may arise between the employee and their employer about the operation of the new NES right;
make clear that an employer must not engage and re-engage (or not re‑engage at all) a casual employee, or reduce or vary their hours, in order to avoid any right or obligation in relation to the new NES right; and
give certainty as to the treatment of pre-conversion periods of employment as a casual employee for other entitlements in the NES.