Fair Work Commission rules casual employees can request permanent work after 12 months: What businesses need to know

The Fair Work Commission has made a landmark decision which will give casual employees covered by an additional 85 workplace awards the right to request permanent work after being employed for 12 months.

While these provisions have been present in awards such as the Building and Construction for years, the changes that spring from the commission’s recent decision will bring into another 85, in a move experts say will most affect the retail and hospitality industries.

The initial proposals from various workers’ unions on this issue angled to have employees able to make a request for permanent work after six months rather than 12, but the commission rejected that proposal.

In its decision, the Fair Work Commission (FWC) said as long as the casual employment was “long-term in nature, and to be of sufficient regularity”, it considered it to be “fair and necessary for the employee to have access to a mechanism by which the casual employment may be converted to an appropriate form of permanent employment”.

Union groups and retail bodies have taken different positions on the decision, but business leaders in the Australian SME space have viewed the ruling moderately favourably, with Small Business Ombudsman Kate Carnell saying on Twitter the ruling was “balanced”.

“Casuals are meant to be casual. If they want permanency after 12 months, that’s fair,” she said.

Speaking to SmartCompany, Council of Small Business Australia chief executive Peter Strong said he was “not greatly perturbed” by the decision, but acknowledges some businesses may find it “annoying”.

The main worry for Strong is the decision will increase the already significant amount of paperwork and red tape Australian businesses have to wade through.

“This decision will create unnecessary red tape for businesses. Instead of concentrating on your business and keeping someone in a job, you have to stop actually running your business and run the workplace relations system instead,” he says.

“I don’t think the decision really reflects the modern world or the reality of a modern workplace.”

What businesses need to know

Managing director of Workplace Law Athena Koelmeyer tells SmartCompany while the decision will affect businesses both big and small, the aim was to make any business “who has made a practise of relying on casual labour” rethink their staff employment.

The commission is still taking submissions on the decision until August 2 and the clauses won’t be inserted into awards tomorrow, Koelmeyer says businesses should know the provisions will be retroactive.

“The principle of it will be if you have a casual who has worked with you for twelve months in a regular and systematic pattern of work, then they will have the right to ask for permanent employment,” she says.

“The crux of the provision is that the employee could relatively easily be converted to part time employment, so this doesn’t apply to truly casual employees, as truly casual work is random and ad hoc.”

In its decision the FWC outlines the provisions apply to employees who worked “a pattern of hours on an ongoing basis which, without significant adjustment, could continue to be performed in accordance with the full-time or part-time employment”.

The Commission has also outlined a series of provisions for employers in which they can refuse the request of a casual employee, the main provision being if the switch would require a “significant adjustment” to the staff members working hours.

Koelmeyer says businesses can also refuse an employee’s request if they know they will not need the role in the next 12 months, where it is “known or reasonably foreseeable that the casual employee’s position will cease to exist”, says the FWC.

Finally, businesses can also refuse the requests on “reasonably foreseeable” grounds. Koelmeyer uses the example of a business employing call centre operators, who would have grounds to refuse a casual employee’s request if it were “reasonably known” the call centre would be being outsourced overseas.

Koelmeyer advises businesses to begin to take a “careful look” at employee arrangements to get ahead of the curve before the FWC’s decision is legislated.

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