Proposed Law Updates Pathways from Casual to Full-Time Employment

By Hayden Nelson

On 4 September 2023, the Government introduced the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 (Cth) (‘the Bill’) where one of its aims is to shore up the pathway for casual employees to become full-time employees.

The Hon Tony Burke, the Minister for Employment and Workplace Relations, in his second reading speech, explained that this Bill will address the following problematic situation facing certain casual employees:

But when someone is called ‘casual’ on their pay slip or their contract yet is rostered like a permanent worker, expected to accept shifts like a permanent worker, and has a job likely to continue into the future indefinitely, then there’s a clear loophole. A worker like this should be able to choose secure employment if they want it.[1]

Firstly, what is a casual employee?

The legal definition of a casual employee is an employee who accepts employment from an employer on the basis that their ‘employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person.’[2]

Are employers currently required to convert casuals into full-time employees?

Under the National Employment Standards,[3] there are rules regarding offers and requests for a casual employee to become a full-time (or part-time) employee (casual conversion). Whilst casual employees have the choice as to whether they wish to become part-time or full-time employees, employers are under an obligation to offer casual employees this choice.

Summary of the Current Rules

  • An employer must make an offer to their casual employee where the employee has been employed by that employer for a period of 12 months and that, during at least the preceding 6 months, the employee has worked a regular pattern of hours on an ongoing basis which would enable them to continue to work as either a full-time or part-time employee.[4]
    • This offer must be in writing.[5]
    • The employee must provide a written response to their employer within 21 days, otherwise, they will be deemed to have declined the offer.[6]
  • And vice versa, a casual employee may make a request of their employer to become either a part-time or full-time employee if they meet the same requirements outlined in the previous dot point.[7]
    • The request must be in writing.[8]
    • The employer must provide a written response to this request within 21 days.[9]
    • Small Business employers are exempt and have no obligation to convert casual employees into full-time employees.[10] A small business employer is defined as an employer who employs less than 15 employees.[11]
    • An employer’s offer of casual conversion is not required where there are reasonable grounds not to make an offer, including:[12]
      • Reasonable grounds include that the employee’s position will not exist 12 months after deciding not to make the offer, the hours of work being significantly reduced in that same period, a significant change to the days/times on which the employee’s work is to be performed in that same period, and whether making the offer would go against the recruitment/selection process required under Commonwealth or State/Territory law.

What changes will this Bill make to the casual conversion process?

Under this Bill, small business employers will no longer be exempt from the obligation to offer casual conversion. They will be required to offer casual conversion after 12 months. All other employers are now required to offer casual conversion after only 6 months. Likewise, small business employees can make casual conversion requests after 12 months and all other employees can make casual conversion requests after only 6 months.[13]

If an employer rejects the employee’s request for casual conversion, they are now required to provide detailed reasons for their decision based on specified grounds and give information on how the employee may attempt to resolve the dispute.[14] This dispute resolution option will be provided through the new pathway of being able to refer the dispute to the Fair Work Commission (if the employee and employer are unable to come to a resolution).[15] If employers do so deliberately, they can be penalised for circumventing any of their casual conversion obligations. The Bill also provides penalties for circumstances where the employer misrepresents that the casual employee is a contractor (known as ‘sham contracting’).[16]

At the time of writing this article, the Bill is currently before the House of Representatives.

This article is not meant to act as legal advice and serves the purpose of providing academically generalised information regarding the general principles of employment law. If you require qualified legal advice on anything mentioned in this article, our experienced team of solicitors at Foulsham & Geddes are here to help. Please get in touch with us on 02 9232 8033 today to make an enquiry.

[1] Commonwealth, Second Reading Speech, House of Representatives, 4 September 2023, 63 (Tony Burke, Minister for Employment and Workplace Relations).

[2] Fair Work Act 2009 (Cth) s 15A.

[3] Ibid Part 2-2 div 4A.

[4] Ibid s 66B.

[5] Ibid s 66B(2).

[6] Ibid s 66D.

[7] Ibid s 66F.

[8] Ibid s 66F(2).

[9] Ibid s 66G.

[10] Ibid s 66A.

[11] Ibid s 23.

[12] Ibid s 66C(1)(a); s 66C(2).

[13] Explanatory Memorandum, Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 (Cth) 60 [317].

[14] Ibid 61 [326].

[15] Ibid 66-70 [347]-[371].

[16] Ibid 31 [172].