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Payroll Compliance

Casual Conversion and working a regular pattern of hours

November 25, 2021
0 min read
Payroll Compliance

Nearly 3 million Australian workers are engaged as casual employees. 

The laws and regulations relating to casual employment are notoriously complicated to administer, exposing many employers to risk of liability and financial penalties. Therefore, it is essential for employers to be up to date on obligations owed to casual employees.

Earlier this year, the Commonwealth Government made significant amendments to the Fair Work Act 2009 (Cth) with respect to casual employment. In particular, as of 27 September 2021 employers are required to offer eligible casual employees who work a “regular pattern of hours on an ongoing basis” an opportunity to convert their engagement into a permanent role with ordinary hours of work. This is known as “casual conversion”.

These changes were a concern that have been expressed frequently throughout the year, generally around this concept of  “regular pattern of hours”.  

What is casual conversion? 

Casual conversion is the process of a casual employee becoming a permanent full-time or part-time employee. Employers are now required to make an offer of casual conversion in writing to eligible casual employees within 21 days of the employee’s 12 month anniversary. 

Employees will be eligible for casual conversion if they:

  • have been employed for 12 months or more
  • for at least the 6 month period leading into their 12 month anniversary, have worked a regular pattern of hours on an ongoing basis without significant adjustment, and
  • could continue to work these hours as a full-time or part-time employee without significant changes. 

The employee must write back accepting the offer within 21 days of receiving the offer or the employer can assume it has been declined. 

Exemptions for reasonable grounds

There are only a few valid reasons as to why an employer may not offer casual conversion: 

  1. The employee has not worked a regular pattern of hours; 
  1. On an ongoing period of 6 months
  2. Which they could continue doing on a full or part time engagement
  1. The business has reasonable ground for not making an offer.

What amounts to a “reasonable ground” for not making an offer will depend on the circumstances of each employee. An offer to convert to permanent employment is based on the hours that an employee usually performs as a casual employee. For example, if they only work one day per week, the offer to convert need only be for continuing employment at one day per week – there is no obligation to offer additional hours.

What is a regular pattern of hours? 

The Fair Work Act does not define what a regular pattern of hours is, however it can be interpreted as a regular pattern based on shift length, working particular days and at certain times of the day. 

An example of what could be considered a regular pattern of hours is; if an employee has worked shifts of eight hours on every Monday and Tuesday for the most recent nine months of their employment, then it is likely they have worked a regular pattern of hours for the requisite six months. 

Depending on the circumstances of any particular case, the employee may still have worked a regular pattern of hours even with some fluctuation or variation in specific times and days worked, including (for example) if the employee took time away from work when ill or on holiday. 

Interpreting a regular pattern of hours

It is evident that there is a level of interpretation of what constitutes a regular pattern of hours. There is not a clear cut definition of a regular pattern of hours, meaning that there is uncertainty around the level of fluctuation and variation that could be deemed an irregular pattern of hours. 

The example provided above is fairly evident of a regular pattern of hours, what if there was some variation in the previous 6 months, where an employee worked regular hours per week of between 30-32 hours but on different days and times that changed from week to week due to other employees availability. 

There is a level of interpretation on the degree of variation, which can be difficult for employers to calculate especially for large companies with large numbers of casual employees. 

Calculating a regular pattern of hours 

The difficulty for employers is actually calculating a regular pattern of hours. Large companies in particular have to calculate a large number of employees case by case every six months to determine whether or not they meet the casual conversion requirements. 

There are multiple factors in determining whether or not an employee has been working a regular pattern of hours; this will require a review of the employees previous 6 months of timesheets, looking at patterns in shift length, days of shifts and timing of shifts.  

We believe that techniques from the field of time series analysis could help make progress towards a better understanding of what constitutes a regular pattern of hours.

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