Sally McManus, secretary of the Australian Council of Trade Unions, pushed for a universal right for casuals to convert to permanent work. Paul Jeffers
In a landmark ruling, the Fair Work Commission has granted millions of casual workers rights to convert to permanent employment if they work regular hours over 12 months.
The five-member full bench, led by vice-president Adam Hatcher, handed down its long-awaited decision in its review of casual and part-time employment on Wednesday, accepting unions' position that "the unrestricted use of casual employment without the safeguard of a casual conversion clause may operate to undermine the fairness and relevance of the safety net".
The commission backed a model conversion clause for 85 modern awards, including retail, banking, aged-care, agriculture and restaurant industries, which would allow casuals to convert if, over 12 months, they "worked a pattern of hours on an ongoing basis which, without significant adjustment" could continue to be performed as full-time or part-time employment.
Employers can refuse a conversion on reasonable grounds, including that it would require a significant adjustment to the casual's hours of work to accommodate the conversion or that they foresee the casual position would cease to exist.
Casual 'unfair' to safety net
The casual rights case is the biggest case in the commission next to the penalty rates case and affects more than 2.53 million casuals, or 20.8 per cent of the workforce.
Casuals generally do not have fixed weekly hours and receive about a 20 per cent loading on their base rate in place of paid leave entitlements and other conditions in the National Employment Standards (NES).
The full bench said that in the sense casuals lacked any guarantee of future hours, "employees accepting casual employment will usually not be doing so on a fully informed basis".
Further, "the permanent denial to the casual employee of the relevant NES entitlements at the election of the employer in those circumstances may, we consider, operate to deprive the NES element of the safety net of its relevance and thereby give rise to unfairness".
"If the casual employment turns out to be long-term in nature, and to be of sufficient regularity ... then we consider 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," the bench said.
Minimum two-hour work for casuals
The Australian Council of Trade Unions sought absolute rights for casuals to convert to permanent after six months of regular work in more than 100 industry awards and pushed to remove the employer's right to refuse such a conversion.
It also proposed minimum hours for casuals and part-time employees of at least four hours per day or shift.
The full bench rejected the case for absolute conversion rights and rejected minimum hours "across the board" due to its potential to reduce workforce participation and "inhibit" flexible work practices.
However, it reached a "provisional view" there should be a two-hour minimum engagement period for casuals in 34 modern awards "to avoid their exploitation in order to meet the modern awards objective".
Employer groups had warned that if the unions' conversion claims were accepted, thousands of casual jobs would be terminated.
"If employers were forced to convert casuals after six months of regular employment, the predicable result would be that many employers would ensure that they do not employ casuals for more than six months, or they would outsource or offshore work," Australian Industry Group chief executive Innes Willox has said.