The Casual Conversion Clause and how it may affect your business

Are you aware of the Casual Conversion Clause and how it may affect your business? casual employees

What is the causal conversion clause?

The new casual conversion clause, which came into effect on 1 October 2018, addresses the obligations of employers who have casual staff working on a regular and systematic basis.

This clause affects over 80 Modern Awards and many small businesses which rely on causal employees.

The Clause gives employees who have been working on a regular basis for 12 months or more, the right to request permanent full-time or permanent part-time employment. (Note: for some Modern Awards the period is only 6 months.)


For example:

  • A casual staff member who has worked on average 38 hours or more per week for over a year can request permanent employment.
  • A casual worker who has been rostered to work 48 weekends in the last 12 months can request permanent part-time employment.


How does it affect your business?

If your business employs staff on a casual basis who work “a pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to perform as a full-time employee or part-time employee”, you must notify the employee in writing that they are entitled to request permanent employment.

The timeline that the employer has to notify the employee in writing does vary depending on the Award.

It should be noted that this clause does not require the business to offer permanent employment, the request can be refused on reasonable grounds, but refusal must be given in writing within 21 days of the request being made.


Our recommendations

  1. Review the Modern Award that relates to your business.
  2. Ensure that all new casual employees are provided with the latest copy of their Award which includes the casual conversion clause.
  3. Update your HR systems; diarise 12-month anniversaries of causal staff to notify them in writing of the Causal Conversion Clause, develop a template notification letter.
  4. Ensure your payroll administration systems can manage conversion requests.
  5. Review your causal workforce every 6-12 months and their performance.
  6. Business forecasting and performance. Causal staff are valuable to many businesses but a set and forget attitude could damage your business.


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