Modern Award

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The Fair Work Commission (FWC) has acted on applications made by employer associations and unions by varying a number of awards to introduce temporary flexibility provisions in light of the COVID-19 pandemic and the associated public health orders. These important measures aim to provide employers with the flexibility to resource their businesses appropriately in the current climate whilst maintaining compliance with the applicable modern award, allowing them to continue active operations and retain employees.

As part of the Commission’s four-yearly review of modern awards[1], the Full Bench of the Fair Work Commission (FWC) recently handed down a number of decisions[2] which have the effect of inserting a model casual conversion clause (Model Clause) into 84 Modern Awards[3] from 1 October 2018.  This provides “regular casual” employees the right to request to convert their employment to permanent full-time or part-time.

The other 28 Modern Awards that already contain a casual conversion clause prior to 1 October 2018 will remain unchanged.

Who can request for casual conversion?

The Model Clause provides a framework under which employees are entitled to request to convert their employment from casual to either permanent part-time or full-time, in certain circumstances.

The entitlement arises if the employee is a “regular casual employee” within the definition provided in the Model Clause.  This requires the employee to have, in the preceding 12 months, worked 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 under the provisions of the Modern Award.

When can an employer refuse the request?

In the event that an employee is a “regular casual” employee for the purpose of the Model Clause, the employee is not provided with an automatic right to be converted to permanent full-time or part-time employment.  The Model Clause allows employers to refuse a request on “reasonable grounds”, including any of the following:

  • It would require a significant adjustment to the employee’s hours of work in order for the employee to be engaged as a full-time or part-time employee in accordance with the provisions of the Award. That is, the employee is not truly a regular casual employee under the Award.
  • It is known or reasonably foreseeable that the regular casual employee’s position will cease to exist within the next 12 months.
  • It is known or reasonably foreseeable that the hours of work which the regular casual employee is required to perform will be significantly reduced in the next 12 months.
  • It is known or reasonably foreseeable that there will be a significant change in the days and/or times at which the employee’s hours of work are required to be performed in the next 12 months which cannot be accommodated within the days and/or hours during which the employee is available to work.

For any ground of refusal to be reasonable, the employer must base the reason on facts which are known or reasonably foreseeable at the time the decision is made.

In our experience, many employers are under the false impression that, if they put an employee on a ‘common law contract’ and give them a fancy job title, they will be award-free, particularly if they are paid well above the award rates.

The recent case of Karen Muscat v Chase Commercial Pty Limited [2018] FWC 1398 reminds us that this just isn’t always true.

As part of its four yearly review of modern awards, the Full Bench of the Fair Work Commission (FWC) has recently considered whether a clause found in many modern awards allowing employers to make deductions from an employee’s termination pay (where the employee fails to give sufficient notice of resignation) should be removed, changed or included in all modern awards.

A Full Bench of the Fair Work Commission has ruled that provisions dealing with the transfer of employment and service for annual leave purposes which are contained in 11 Australian modern awards must be amended because the provisions are inconsistent with the National Employment Standards (NES) contained in the Fair Work Act 2009.

The decision was handed down as part of the Full Bench’s review of modern award terms which are inconsistent with the NES, as part of the Commission’s 4 yearly modern award review process.

Generally, where there is a “transfer of business” between two companies (that is, a transfer of employees in association with, for example, a transfer of assets or an outsourcing), the period of service of the employees with the old employer will be deemed by the Fair Work Act to count as service with the new employer.

However, section 91 of the Fair Work Act (which forms part of the NES) provides that the new employer may decide not to recognise service for the purpose of annual leave entitlements – that is, choose not to accept the employees’ accrued annual leave balances – provided that the old employer and new employer are non-associated companies.

Rights of employees upon redundancy of their position and in the case of any resulting termination of the employee’s employment will depend upon whether the employee falls into the Federal employment and industrial relations jurisdiction (National System Employees) or under the jurisdiction of the State in which the employee works.

National System Employees…