Casual conversion clauses have been a feature of many modern awards for a few years now. However they are now a creature of statute, meaning that they form part of the National Employment Standards (NES) for non Award employees.
A casual employee is one engaged in circumstances where;
• the employer makes no firm advance commitment that the work will continue indefinitely with an agreed pattern of work, and
• the employee accepts the offer knowing that there is no firm advance commitment.*
Conversion to permanent employment must be offered (in writing) to an eligible employee, who is defined as –
a person who:
has been employed for a period of 12 months and
during the last six months, has worked a regular pattern of hours on an ongoing basis which, without significant adjustment, they could continue to work as either a full-time or part-time employee.
The offer need not be made if there are “reasonable grounds” not to do so. These include –
(A) if the employee’s position will cease to exist within the period of 12 months after the time of deciding not to make the offer;
(B) the hours of work the employee is required to perform will be significantly reduced in that 12-month period;
(C) there will be a significant change in the days and/or times the employee will be required to perform work in that period, which cannot be accommodated with the days or times the employee is available to work; or
(D) making the offer would not comply with a recruitment or selection process required under a federal, state or territory law.
If the offer cannot be made, an explanation in writing must be provided to the employee.
These rules do not apply to small businesses (less than 15 employees).
Also remember that when engaging a new casual employee, you must provide a Casual Employment Information Statement (CEIS). This can be found on this link
Penalties apply for non compliance, so make sure you conduct a full review on a regular basis.
* this picks up the “firm advance commitment’ approach adopted by the High Court in WorkPac Pty Ltd v Rossato  HCA 23.
For further information please contact Tony O’Connor – Litigation Partner.