Yesterday the Fair Work Commission handed down its decision in the casual and part-time employment test case.
This case had the potential to fundamentally challenge an employer’s right to determine how they employed labour and allocated working hours to employees.
Pleasingly the Commission rejected those parts of the Australian Council of Trade Unions (ACTU) claims that were the primary concern for employers; for instance requiring employers to allocate additional hours of work to existing part-time and casual employees regardless of whether this suited the employer, was cost effective or restricted the employer’s right to employ more or different people.
While granting some of the ACTU’s claims, the Commission has moderated what was claimed to a point where most if not all employers can effectively manage the outcome without unduly hindering their business operations.
The proceedings centred on claims by the ACTU to:
- Oblige an employer to allocate additional working hours to existing casual and part-time employees with no right of objection for the employer and irrespective of whether this was the efficient way for the employer to run their business
- Oblige an employer to convert a casual employee to be a permanent employee after six months of regular employment with no right of objection for the employer
- introduce a four-hour minimum engagement for casual and part-time employees irrespective of the circumstances of the industry oncerned
In their decision, a Full Bench of the Commission rejected all of these claims in whole or part.
The Commission rejected the ACTU’s claim to impose prohibitions on hiring new employees before offering additional hours to existing employees, finding it would be “unsustainable for a wide range of reasons”.
The Commission rejected the ACTU’s casual conversion claim but proposes to insert a form of casual conversion clause into the 85 modern awards that do not currently have one. The conversion clause will allow a limited class of casual employees to convert to permanent employment only in certain circumstances.
The right to seek conversion will only apply where the employee has worked a pattern of hours for at least 12 months which, with reasonable adjustments, could be continued in accordance with the full-time or part-time employment provisions of the relevant award.
An employer can refuse a conversion request if:
- conversion would require a significant adjustment to the casual employee’s hours of work to accommodate them in full-time or part-time employment;
- it is reasonably foreseeable that the casual employee’s position will cease to exist, or the employee’s hours of work will significantly change or be reduced within the next 12 months; or
- other reasonable grounds exist (based on facts which are known or reasonably foreseeable).
In rejecting the ACTU’s four-hour minimum engagement claim, the Commission expressed a provisional view that a two-hour minimum engagement should be inserted into the 34 modern awards that do not currently contain any minimum engagement.
ABLA played a leading role in the proceedings, representing the Australian Chamber of Commerce and Industry as well as a large number of other employer and industry bodies which opposed the ACTU claim.
Had the ACTU claims succeeded on the terms sought, they would have had the effect of fundamentally constraining an employer’s right to manage their workforce in a sensible and productive manner.
The Commission has indicated that it will provide interested parties with an opportunity to make submissions about the proposed changes, with further hearings likely to be held throughout the remainder of 2017.
ABLA will of course keep clients updated as the proceedings continue.
As always, if there is any issue within your business that might give rise to a claim, early intervention is the best protection. Feel free to contact us on 1300 565 846 if this raises any questions.