[2017] FWCFB 3541: Casual Workers Win Right to Request Permanent Employment

In a landmark decision handed down yesterday (5 July 2017) by the Full Bench of the Fair Work Commission (the Commission),  (4 yearly review of modern awards – Casual employment and Part-time employment [2017] FWCFB  3541 (5 July 2017)), casual staff covered under 85 modern awards now have the right to request full or part-time employment status after 12 months.

Employers can refuse the request on reasonable grounds, including that it would require a significant adjustment to a casual employee's hours of work or they could foresee their position would no longer exist in the next 12 months.

Background to the Case

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 guaranteed hours of work, can be terminated without notice and receive about a 20 per cent loading on their base rate in place of paid sick and annual leave and other conditions in the National Employment Standards (NES).

The five-member Full Bench, led by Vice-President Adam Hatcher 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".

The Australian Council of Trade Unions (ACTU) 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".

Industry Reaction and Comment on the Decision

The decision was largely welcomed by the union movement with business groups cautiously backing the Fair Work judgment, which also rejected a range of other union proposals, including a standard minimum four-hour shift. The Full Bench found [at para 365]:

Comment from the AI Group

Australian Industry Group (AI Group) Chief Executive Innes Willox said the decision would "reduce flexibility" for some employers in some industries and "this is a concern given the tough operating environment that many businesses are experiencing".

But he welcomed the commission's rejection of the union's "most damaging" claims, including a "loopy idea" to prohibit hiring more casual or part-time employees until existing employees were offered more hours and minimum four-hour engagements. He said:

The employer group had previously warned that if the unions' claims for absolute conversion rights were accepted, thousands of casual jobs would be terminated.

Reaction from the Unions

Australian Council of Trade Unions (ACTU) Secretary Sally McManus said the ruling was a small step towards addressing an "epidemic of insecure work" and the casualisation of the country's workforce.

She commented that too many employers have been abusing the term “casual” and use it as a business model to drive down wages and that 40 per cent of Australian workers relied on insecure work with lower wages and superannuation.

The Unions' claim was designed to give casual employees who are effectively permanent but miss out on entitlements such as sick leave, annual leave and other benefits greater job security.

The Penalty Rate Decision

Unions have also launched a Federal Court challenge to a separate Fair Work ruling which slashed Sunday and public holiday penalty rates for hospitality, fast food, retail and pharmacy workers. ACTU President Ged Kearney said the cuts that came into effect last weekend would cost some of the country's lowest paid workers thousands of dollars a year.  The court has agreed to fast-track the appeal, which is likely to be heard by a Full Bench of judges in September or October 2017.

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Fair Work Commission grants casuals right to become permanent employees – afr.com.au

Casuals given chance to make to positions permanent in Fair Work Commission ruling – heraldsun.com.au

Casual workers win right to request permanent employment after 12 months under Fair Work ruling – abc.net.au

Casual staff win right to ask for permanent work – smh.com.au

4 yearly review of modern awards – Casual employment and Part-time employment [2017] FWCFB 3541 (5 July 2017)