Compliance deadline approaching for casual conversion

The key compliance date of 27 September 2021 for employers to meet new ‘casual conversion’ requirements is fast approaching. This is the deadline for compliance with the latest changes to the Fair Work Act 2009 (Cth) (Fair Work Act), which commenced on 27 March 2021.

Under the changes, employers other than ‘small business employers’ are required to consider eligibility criteria for casual employees engaged on or before 27 March 2021 and either:

• make an offer of casual conversion to each employee who meets certain requirements; or
• notify the employee that the employer is declining to make an offer of conversion to permanent employment.

This article canvasses the deadlines for these requirements, and the matters that employers should bear in mind when managing their compliance with the casual conversion provisions in the Fair Work Act.

What is ‘casual conversion’?

‘Casual conversion’ is an agreement between an employer and an employee who is engaged on a casual basis that the employee will transition to permanent employment, that is part-time or full-time employment.

When are employers required to offer casual conversion?

Employers are required to assess all of their casual employees who were engaged on or before 27 March 2021 (Existing Casuals), to determine whether any are ‘eligible’ for casual conversion. The deadline to complete this assessment and otherwise offer or refuse conversion to Existing Casuals is 27 September 2021.

For Existing Casuals, employers will need to consider whether, for at least the last six months prior to the date of the assessment, they have 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.

For casual employees engaged after 27 March 2021, an employee is eligible if they have been engaged by the employer as a casual for at least the last twelve months ending on the date of the assessment, and, for at least the last six months ending on that date, they have 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.

If the employee has worked the equivalent of full-time hours in the six-month period, the offer must be to convert to full-time employment; or, if the employee has worked less than the equivalent of full-time hours in that period, the offer must be to convert to part-time employment that is consistent with the regular pattern of hours.

Any offer to convert must be made to the employee, in writing, within twenty-one days of the date of the assessment. For Existing Casuals, the final deadline for making offers is 18 October 2021.

Importantly, these requirements do not apply to ‘small business employers.’ A ‘small business employer’ is a business that employs fewer than 15 employees, including across any associated entities of the business.

When can employers decline to make offers?

An employer is not required to make an offer if an employee is ineligible, or if the employer decides on reasonable grounds not to make an offer. Reasonable grounds may include that, within twelve months after declining to make the offer, the employee’s position will cease to exist, their work hours will be significantly reduced, or their regular pattern of work days and hours will change in a way that cannot be accommodated within their availability.

The reasonable grounds must be based on facts which are known or reasonably foreseeable at the time of the decision not to make an offer, and employers cannot change an employee’s work hours in order to avoid having to make an offer.

If the employer declines or is not required to make an offer, they must still notify the employee in writing and provide detailed reasons for this outcome, including any reasonable grounds relied on in declining to make an offer, within twenty-one days of the date of the assessment. For Existing Casuals, this compliance date is no later than 27 September.

What happens after 27 September 2021?

Once the ‘transitional period’ ends, the same requirements apply in respect of casual employees engaged by the employer after 27 March 2021. Employers have an ongoing positive obligation to make offers, or give written notice if declining to make offers, to new casuals within twenty-one days of their one-year anniversary of being engaged by the employer.

If you require assistance in respect of any of the matters raised above please contact the NRA Legal team on 1800 572 679.