In the current four yearly review of modern awards, the Fair Work Commission has decided that all awards should provide a right for casual employees to convert to permanent employment in certain circumstances.
The Commission has also expressed a “preliminary view” that it is necessary for awards to include an entitlement to take unpaid domestic violence leave in relevant circumstances.
While the changes are yet to take effect, employers should begin planning for them now. Partner, Andrew Tobin discusses the key issues.
Casual conversion
The Commission has decided that modern awards should contain a provision by which casual employees may elect to convert to full-time or part-time employment, subject to specified criteria and restrictions. They believe this is necessary in order for awards, together with the National Employment Standards (NES), to provide a fair and relevant minimum safety net of employment terms and conditions.
The Commission accepted a submission by the Australian Council of Trade Unions (ACTU) arguing 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.
To give effect to the decision, the Commission has developed a model casual conversion clause, proposed for inclusion in 85 modern awards which do not currently contain such a provision, with the following features:
- a qualifying period of 12 calendar months;
- a qualifying criterion that the casual employee has, over the qualifying period, worked a pattern of hours on an ongoing basis which, without significant adjustment, could continue to be performed in accordance with the full-time or part-time employment provisions of the relevant award;
- the employer must provide all casual employees (whether they become eligible for conversion or not) with a copy of the casual conversion clause within the first 12 months after their initial engagement; and
- a conversion may be refused:
- if it would require a significant adjustment to the casual employee’s hours of work to accommodate them in full-time or part-time employment in accordance with the terms of the applicable modern award; or
- if it is known or 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
- on other reasonable grounds based on facts which are known or reasonably foreseeable.
Further consultation will occur with interested parties in relation to the model clause before it takes effect, with the prospect for some specific variations of the model in particular industries.
The existing casual conversion clauses in some awards will not change, although submissions will be invited about whether the current employer notification requirement in those awards should be simplified to correspond with the proposed notification requirement in the model clause. One feature of the employer notification requirement in existing clauses, absent from the model clause, is that they oblige employers to identify casuals eligible for conversion.
Domestic violence leave
The ACTU had also applied for all awards to be varied in order to provide employees with a right to take up to ten days paid family and domestic violence leave per year, not accumulating from year to year and, if exhausted, up to two days of further unpaid leave on each occasion required.
That claim was rejected, as was the detail of the model clause proposed by the ACTU, which the Commission found to be “too broad and uncertain”.
Instead, the Commission has expressed the “preliminary view” that provision for unpaid family and domestic violence leave in awards was necessary to meet the following modern award objectives:
- to assist the relative living standards and the needs of the low paid; and
- to promote social inclusion through increased workforce participation, particularly for women.
The Commission has indicated that it will give interested parties the opportunity to make submissions or call evidence before deciding the matter conclusively. Issues for further consideration, apart from the threshold question of whether the entitlement should exist at all, include:
- the circumstances in which the leave might be taken;
- the extent of the leave (i.e. how many days of unpaid leave);
- how the leave might be accessed and whether it would count towards continuing service;
- how the leave will apply to part-time employees; and
- how an entitlement to take the leave would be substantiated.
Our prediction is that, by the end of the review, some formal recognition of the need for employees affected by family and domestic violence to take leave will be incorporated into modern award leave provisions.
It is obvious that the existing safety net of terms and conditions of employment in the NES and awards falls short of catering to the needs of workers affected by family violence who, often urgently, need time away from work to seek court orders or to find alternative accommodation. It is also obvious that domestic violence is far more prevalent than some, not affected, might imagine. Australian police deal with 5,000 domestic violence matters on average every week – that’s once every two minutes! [1]
Indicative of this is that paid family and domestic violence leave entitlements are now finding their way into some workplaces through enterprise bargaining or policy and into the public sector.
The cost to employers in the vanguard does not so far seem to have been particularly onerous. For example, the Commission heard expert evidence that Telstra, who included ten days paid domestic violence leave in their 2015 enterprise agreement, had seen 22 out of 32,000 employees take an average of two to three days leave over a six month period.
Next steps for employers
- Employers need to keep themselves informed about changes to awards as applicable to their businesses. Compliance is mandatory and non-compliance can lead to prosecution for unpaid entitlements and civil penalties. Even where applicable awards have been displaced by enterprise agreements or other industrial instruments, changes to the safety net will have compliance implications over the longer term.
- Employers with casual workforces not previously entitled to seek conversion to permanent employment should now be considering how that right might be both accommodated and managed, bearing in mind that it will become mandatory in most instances to inform casual workers about their right of conversion.
- Even in the absence of a mandated entitlement to take leave specifically to deal with the issues for individuals affected by domestic violence, the prevalence of the issue is such that employers might want to consider developing a dedicated policy response connecting victims of violence with existing leave entitlements, employee assistance programs and other employer support already available.
- Employers about to embark on bargaining for a new enterprise agreement should be thinking about:
- the arrangements for their casual workforce and, particularly, about whether, and the conditions under which, casual employees might seek to convert to permanent employment;
- the prospect for including an entitlement to take leave, paid or unpaid, to cater to the pressures workers can face in dealing with domestic and family violence, over and above other kinds of leave currently available.
For further information or assistance, contact our Industrial and Employment law team.
[1] “Australian police deal with domestic violence every two minutes”, Clare Blumer, ABC News, 21 April 2016, http://www.abc.net.au/news/2016-04-21/domestic-violence/7341716 accessed 24 July 2017.