Don’t Get Casual About Long Term Casuals

Did you know? Casual employees who have worked for your business for 12 months may need to be offered the option to convert to full-time or part-time (permanent) employment. As SME and small business accounting specialists this is an issue we regularly flag for clients – and although the rules are more flexible for small businesses this topic is still important for anyone employing casual staff.

So how do the rules work?

If you have more than 15 employees, you need to make a written offer to convert your casual employees to permanent employment within 21 days after their 12-month anniversary with you, if they:

• have been employed by you for 12 months
• have worked a regular pattern of hours on an ongoing basis for at least the last 6 months
• could continue working these hours as a full-time or part-time employee without significant changes

The offer needs to be for the employee to convert to; full-time employment, or part-time employment. To accept an offer to convert, your employees need to respond to you in writing within 21 days after getting the offer. If they don’t respond, you are permitted to assume that they’ve declined the offer.

If you decide not to offer casual conversion, you need to write to the employee within 21 days after their 12 month anniversary, telling them:

• you aren’t making an offer of casual conversion
• the reasons for not making the offer – there are limited reasons an employer can rely on if not making an offer. Refer to Reasonable Grounds on the Fairwork website.

By 27 September 2021, employers (excluding small business employers – see below) need to assess whether any of their existing casual employees employed before 27 March 2021 are eligible to be offered to convert to permanent employment.

Small Business Employer Concession

If you have fewer than 15 employees, you are a small business employer and don’t have to make an offer to convert your casual employees to permanent employment. When counting the number of employees, employees of your associated businesses are included.

But this doesn’t mean you can ignore employee requests for conversion. An eligible casual employee of a small business can still request to convert to permanent employment at any time on or after their 12-month anniversary. See Employees requesting casual conversion for eligibility information.

You need to respond in writing to an employee’s request within 21 days and tell the employee if they have or haven’t accepted the request. If you refuse the request, you also have to tell the employee the reasons why in the written response. Refer to Reasonable Grounds on the Fairwork website.

Employers can’t refuse a request unless they have discussed the request with the employee and have reasonable grounds to refuse the request.

Casual employees who believe they’re eligible to become permanent employees can make a request for conversion every 6 months.

If you would like to understand in more detail if this applies to your business, please contact the team at Xact Accounting.