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Casual conversion is the process for casual employees to change to permanent employment (full-time or part-time). A change to permanent employment can occur at any time if the employer and employee agree. Casuals also have a pathway to permanent employment under the Fair Work Act 2009’s National Employment Standards (NES). Recent updates under the NES have altered this process, introducing what is now known as the employee choice pathway
What is casual conversion?
Defining casual conversion under Fair Work
Simply put, casual conversion is a legislative process that allows casual employees to request a change from casual to permanent employment. It’s an option now formally known as the employee choice pathway, and it can help employees achieve greater job security by transitioning into a permanent position – if certain eligibility requirements are met.
Employees become eligible under this pathway after they've been employed for at least six months (or 12 months for small businesses), provided they believe their role no longer aligns with the casual employment definition set out in the Fair Work Act.
Under this pathway, an employer can only refuse to convert the employee to permanent employment for specific reasons.
Why casual conversion matters for employers and employees
For employees, casual conversion means more stability, guaranteed hours, and entitlement to leave and other benefits. For employers, managing casual conversion appropriately helps them stay compliant with employment law, potentially boosting their workforce stability while supporting a positive workplace culture.
Casual conversion laws and recent changes
New casual conversion laws: What you need to know
In a legislative update effective from 26 August 2024, casual conversion under the NES transitioned to what's now termed the employee choice pathway. Casual employment prior to this date does not count towards eligibility assessment under the new rules.
Casuals employed before 26 August 2024 can become eligible to issue notices under the employee choice pathway from 26 February 2025 (or 26 August 2025 for small businesses). The original casual conversion mechanism is still accessible for a transitional period for certain casual employees employed before this date.
Casual conversion changes and their impact on businesses
These casual conversion changes require employers to closely track and review employee engagements regularly. Businesses must ensure that their employment policies reflect these recent updates, meaning fewer risks related to non-compliance, legal disputes and potential penalties.
Employers are encouraged to proactively discuss conversion possibilities with all eligible employees to prevent disputes and support smoother transitions.
The casual conversion process: Steps for employers and employees
The casual conversion process involves a number of important steps and obligations for both parties. Employers need to be well-versed in this process to meet their legal obligations. The employee must provide a written notice to the employer requesting to change to permanent employment under the employee choice pathway. The employer must consult with the employee with respect to their request and respond in writing within 21 days of the employee providing the notice.
How casual to permanent pay conversion works
One major concern for employers is understanding the casual to permanent pay conversion. Converting a casual employee to a permanent role involves transitioning them onto standard full-time or part-time employment entitlements, including paid leave and potentially different hourly rates.
As their employer, you’ll need to consult with the employee on this before accepting the conversion request. Employers should be clear and outline these pay adjustments and conditions in their written acceptance of the conversion notice.
Can an employee refuse casual conversion?
A common employer query is, can an employee refuse casual conversion? Simply put, yes. The employee choice pathway is deliberately structured to ensure voluntary transitions. Employers cannot force casual conversion upon employees – it must be mutual.
Similarly, employers can refuse conversion requests, but only for specific, legally defined reasons, such as substantial operational impacts or compliance concerns.
If the employee rejects an offer of permanent employment and the employer's preference is for a permanent role to be created it is recomended to get in touch with HumanX and discuss potential solutions.
Key deadlines and employer obligations
When an employee provides a written notice requesting casual conversion, employers must respond within 21 days and clearly indicate whether the request has been accepted or declined. If accepted, it must explicitly outline the new employment terms, including employment status, hours, effective date, etc.
Employers should take advantage of the official templates and checklists provided by Fair Work to ensure compliance. Visit the Fair Work website for up-to-date templates and resources.
Casual conversion Fair Work requirements and compliance
Employers must adhere strictly to the requirement of the Fair Work Act to maintain compliance with legal obligations when responding to employee requests for conversion. This includes adherence to time frames for response, consultation obligations and grounds for rejecting a request amongst other things.
Fair Work guidelines on casual conversion
The Fair Work Act stipulates all requirements regarding eligibility, notification requirements, consultation, and acceptable refusal grounds. It’s a good idea to get well-acquainted with these obligations to remain compliant and mitigate potential disputes in the workplace.
Accessing the casual conversion fact sheet
For easy reference, businesses can see the official casual conversion fact sheet provided by Fair Work. It succinctly summarises eligibility criteria, employer obligations, dispute resolution tips, and all legal considerations. You can access this resource at the Fair Work website. Employees can also use the notice template to notify employers of a desire to convert.
Best practices for managing casual conversion in the workplace
Employers should always adopt best practices to manage casual conversion requests. Clear communication, regular reviews of employee roles and preparation to handle conversions in a compliant manner are all smart strategies to implement.
How employers can prepare for casual conversion requests
- Regularly review casual employees’ tenure and roles to anticipate any potential conversion requests.
- Keep clear documentation and good records on every employee’s employment conditions and engagements.
- Educate your management teams about recognising eligibility and how to manage conversion requests.
- Clearly communicate policies and processes related to casual conversion to all staff.
Being prepared is the best way for organisations to smoothly handle requests and promote positive workforce relationships.
Ensuring compliance while supporting workforce stability
To successfully manage casual conversion, businesses should focus on both compliance and workforce stability. Employers must carefully assess their operational needs and workforce structures to accommodate transitions into permanent employment. Doing so means you’ll not only meet legal obligations but also demonstrate a commitment to employee development and retention.
Employers must also avoid taking actions that could be construed as adverse or retaliatory in response to conversion requests, such as reducing an employee’s hours or unfairly changing their employment conditions. Fair Work protections are strict and prohibit these actions. Employees always have pathways to seek redress in the event of perceived adverse actions.
Understanding and handling disputes
In cases where disagreements about casual conversion requests arise, all parties should first attempt a resolution through open dialogue. If it stays unresolved, employees and employers have recourse through the Fair Work Commission's dispute resolution processes. In some instances, the Federal Circuit Court can get involved in settling these disputes.
Employers need to understand these dispute resolution mechanisms and engage constructively if disputes arise. They need to protect the company’s interests while, at the same time, demonstrating fairness to employees.
Protecting employee rights and employer obligations
Employers have legal obligations not to negatively impact employees who want to exercise their casual conversion rights. Negative actions like altering work schedules, reducing hours or unfair dismissals due to conversion requests are all explicitly prohibited. You need to handle all interactions surrounding casual conversion transparently and ethically.
For the latest information on casual conversion laws and requirements, visit the official Fair Work website.
Understanding and managing the casual conversion process can help your business safeguard its operational integrity and stay compliant with employement laws while supporting more positive workplace relations.
Need HR Guidance on Casual Conversion?
Need expert HR guidance around your casual conversion obligations? Contact HumanX HR today to get expert assistance that meets your organisation’s unique needs for smooth employment transitions.
