Casual Conversion

In Australia, the workplace is made up of different types of employees, including permanent and casual employees. Casual employees typically receive a higher hourly wage in recognition of the fact that they do not have access to the entitlements and security afforded to a permanent employee. In recent years, the federal government has introduced statutory rules around a casual employee’s right to convert their employment to a permanent status. Under the Fair Work Act 2009, any eligible casual employee has such a right to so-called ‘casual conversion’. This article looks at the rules regarding casual conversion with reference to a recent case.

Casual employment

Casual employment is characterised by the lack of any firm commitment to ongoing work on the part of either the worker or the employer. A casual worker receives casual loading or pay rate as specified by their employment contract, modern award or registered agreement. A worker who is employed on a casual basis can become permanent through two specific processes:

• casual conversion
• a Fair Work Commission order

Casual conversion

From 26 August 2024, a new pathway will be established for eligible casual employees to apply to change to permanent part-time or full-time employment (different rules apply for casual workers who were employed before 26 August 2024). The new Employment Choice Pathway was added as an employee entitlement to the National Employment Standards.

Under these new provisions, an eligible casual worker can give written notification to their employer of their desire to change to permanent employment. Employees are eligibility to seek conversion if they:

1. are employed for a minimum of 6 months (or 12 months if the employer is a small business) and
2. believe that their employment no longer meets the definition of a casual employee.

For example, a worker employed as a casual kitchenhand at a large hotel starts in the role after 26 August 2024. She works in her current position for 10 months, with regular shifts on every weekday from 9am to 2pm. She believes that there will be ongoing work in the future. Other individuals in the workplace who perform the same job are permanent employees. This worker can provide her manager with a written notice under the Employee Choice Pathway because she feels that her position no longer meets the definition of casual employment.

Refusing casual conversion

The employer can reject a request from a worjer to become a permanent employee under the Employee Choice Pathway. However, the employer can only reject such as request if:

• the employee still meets the definition of a casual employee under the legislation
• the employer has a fair and reasonable operational reason to reject the notification, for instance because it would require substantial organisational changes or significant impact on the business operations, or there would have to be substantial changes to the worker’s employment conditions to comply with an award or agreement, or
• the conversion would prevent the employer from following required statutory recruitment or selection processes.

Employer response

The employer must provide a written response to the conversion notice (either accepting or denying) to the employee within 21 days of receiving the notification.

The employer must consult with the employee before giving this notice. During this consultation meeting, the employer should explain how casual conversion would alter the worker’s employment. When an employer accepts the conversion, they need to provide the following information in their written response:

• the type of new employment status, such as part-time or full-time
• the employee’s new standard hours of work
• when the change in status will come into effect

Unless the employee and employer agree to a specific date, the change must take effect from the first day of the new pay period after the employer responds.

If the employer decides not to accept the conversion, the written response must outline the reasons for this decision.

Casuals employed prior to 26 August 2024

A person employed on a casual basis before 26 August 2024 can make a Pathway notification from 26 February 2025 (or 26 August 2025 for small businesses). For those employed on a casual basis before the statutory date, they cannot provide notice of casual conversion if:

• they are already in a dispute with their employer about converting to permanent employment under the Employee Choice Pathway
• they have refused an offer of conversion from their employer in the last six months
• their employer has refused a previous conversion notice in the last 6 months, or a dispute over Employee Choice has previously been resolved through dispute resolution
• their employer has provided written notification that they will not make an offer of casual conversion, or
• their employer refused a previous request for casual conversion.

Disputes about becoming a permanent employee

When an employee requests casual conversion the employer cannot take adverse action to try to avoid their obligations or take punitive action against the employee (such as changing their pattern of work, reducing their work hours or terminating their employment). The Commission will hear a dispute over casual conversion if it cannot be resolved between employer and employee. In that case, the Commission will first try to resolve the matter through conciliation or mediation. If this is unsuccessful, the Commission will order arbitration where a legally binding decision will be delivered.

Case study

In Application by Natalie Klukowski dispute re: right to request casual conversion [2023], Deputy President Bell dealt with a dispute over casual conversion. In this case, Ms Klukowski asked to convert her casual employment after 12 months of working for a business. The employer refused on the basis that she had not been their employee for a year since the business had been sold during her tenure. DP Bell found that Ms Klukowski’s service with the previous business owner did not count and that there was a difference between ‘being employed’, ‘service’ and ‘continuous service’. As there was no allowance for prior service in the wording of the legislation (as there is for parental leave and unfair dismissal), then the period of service began when the new employer took over. As such, Ms Klukowski did not qualify for the casual conversion provision.

Go To Court Lawyers can answer any questions you have about casual conversion. Please contact our experienced solicitors on 1300 636 846.