In a major decision by the Fair Work Commission (FWC), more than 2 million casual workers in Australia have won the right to ask for permanent employment.

The ruling, handed down July 5, allows casual workers to request an ongoing position if they have worked consistent hours over 12 months. The FWC agreed with arguments from unions that unrestricted use of casual workers was unfair and undermined Australia’s National Employment Standards safety net. The National Employment Standards set out 10 minimum employment benefits for Australian workers. However, casual workers are currently only eligible for two.

How do casual workers become permanent?

The new rules will be included in 85 modern awards, allowing casual workers to request permanent work under certain conditions:

• A qualifying period of 12 months work.
• The work must be in a regular pattern of hours, which without adjustment could fulfil the conditions of a part- or full-time position.
• All employees must be notified of their right to convert within 12 months of their start date.

The Australian Industry Group, and Recruiting & Consulting Services Australia & NZ both unsuccessfully sought to remove the notification obligation in about 20 of the awards. AIG Chief Executive Innes Willox called the union arguments “loopy” and “bogus”. Furthermore, he said that the decisions are concerning for employers.

“Today’s decision will reduce flexibility for some employers in some industries and this is a concern given the tough operating environment that many businesses are experiencing.”

The Australian Council of Trade Unions (ACTU) unsuccessfully argued for automatic conversion after a set period of time. In its ruling, the FWC said people accepting casual employment were doing so on an “uninformed basis”. They said that the changes would lead to better mutual benefit of accepting insecure work. The ACTU estimates as much as 40 per cent of Australia’s workforce is in “insecure work”, such as casual or contract work.

ACTU Secretary Sally McManus said permanent work allows Australians to plan for their future with some certainty.

“Casual workers earn less wages and lower superannuation,” Ms McManus said.

“Too many employers have been abusing the term casual, and use it as a business model to drive down wages.”

“Today’s decision is the first small step towards addressing the crisis of insecure work and casualisation in Australia’s workforce.”

Grounds to refuse casual conversion

Under the decision, there are some conditions in which an employer can refuse permanency for a casual employee. These include:

• A significant change to the employees’ current hours to accommodate them as a permanent employee.
• It is known or probable the current position will  no longer exist.
• The employees’ hours are foreseeably likely to significantly change or reduce in the next 12 months.

Minimum work hours set across the board

The FWC decision also dealt with arguments on minimum shift length. The ACTU was unsuccessful in claims for a minimum 4-hour shift for casual and part-time employees. The Commission decided this could be counterproductive for some industry awards. However, it reached provisional view that 34 awards without minimum shifts will be now include a 2-hour minimum for casuals.

“We do consider that it is necessary for modern awards to contain some form of minimum engagement period for casual employees in order to avoid their exploitation”, the Commission said.

Mr Willox, however, said the union claim for 4-hour shifts did not reflect what workers wanted.

“Many casuals cannot or do not want to work for four hours. For example, school students who work in the fast food industry after school”, he said.

The Australian Retailers Association also expressed concern that retailers will lose the flexibility of using casual workers.

ARA Executive Director Russell Zimmerman said the ruling will only work if part-time employees can be given extra hours without being paid overtime penalties.

Decision only the first step in better working standards 

Ms McManus said the decision was just the first in a series of changes needed for casual workers.

“We have won a first battle in the fight against the epidemic of casualisation … but it only plugs one small hole in a nationwide crisis”.

The FWC full bench decision also rejected union claims for a prohibition on business hiring new casual workers until part-time workers were offered more hours.

Are you juggling a confusing mix of causal, part-time and full-time employees? Roubler can help. Roubler provides full award interpretation for all Modern Awards backed by a fully integrated and managed payroll platform, ensuring absolute compliance is achieved. Roubler stays up-to-date on all changes to award structures so you can eliminate that burden from your workload. If you would like to find out how we can assist your company in keeping compliant with these changes, please get in contact today.