Employer Sued for Unfair Dismissal in Casual Conversion Compliance Case
The Story
Mr Mikhail Mochalov worked for AMES Australiasia as a casual worker for two years before the company dismissed him, along with several other casual workers. The company said this was due to declining sales and financial distress. Mr Mochalov then filed an unfair dismissal claim and postulated that AMES had violated the industry award. Specifically, the provision stating that a casual worker, after 12 months service, may be entitled to transition to a permanent position upon negotiation.
According to Mr Mochalov, AMES failed to provide a written offer to transition to permanent employment.
On the other hand, Ames argued that it had offered Mr Mochalov a permanent position through “informal conversations”. The offer was apparently rejected as Mr Mochalov was dissatisfied with the hourly rate.
Were Casual Worker Rights Breached?
The Fair Work Commission accepted that Mr Mochalov rejected the permanent position due to the lower hourly rate.
However, the Commission held that AMES did not conduct the conversation “in the manner required”. A “proper consultation could have assisted his awareness of the situation” and Mr Mochalov would have been more “fully informed” when considering the offer.
Further, AMES should have “clarified the very probable outcome of termination” and consulted Mr Mochalov about the company’s changing staffing structures.
The Fair Work Commission ruled that AMES had breached Mr Mochalov’s casual worker rights and that he was unfairly dismissed.
Casual Workers have the Right to be Offered a Permanent Position
Under the Fair Work Act 2009, employers must offer casual conversion to eligible workers within 21 days after their 12 month anniversary, unless they have reasonable grounds not to do so (e.g. they plan on making the worker redundant).
The worker must:
Have worked consistent and regular hours during their last six months of employment (Fair Work clarifies what is meant by ‘consistent and regular’ here)
The employer’s offer must:
Allow the worker to continue working full- or part-time without significant adjustments
Be in writing
Eligible casual workers also have the right to request to convert from a casual to permanent position 21 days after their 12 month anniversary. The same above conditions apply.
Once an offer or request is made, the employer must confirm the type of employment, hours of work, and start date of permanent employment, all in writing and within 21 days of the offer being accepted.
Employers cannot dismiss a worker or change their hours to avoid offering or accepting casual conversion. Failing to provide a formal offer of conversion is also in breach of their obligations. An employer guilty of either may find themselves in a dispute in court, as seen in the previously mentioned ruling against AMES Australasia.
Exceptions for Small Businesses
Small business employers are not legally obliged to offer casual conversion. However, workers may still request conversion after 12 months of employment.
Are you Compliant with your Obligations?
Failing to offer a permanent position after 12 months violates casual workers’ rights. Serious penalties apply.
With so many specificities, it can be confusing for employers to navigate through their legal obligations.
Certex has been supporting businesses with how best to engage with employees and contractors for over a decade. Our iEngage Program is an integral part of our suite of risk assessments. It is a high-level assessment of how compliant you are with your obligations. It is designed to identify risks and areas that may require further support.
The ruling against AMES Australasia is a warning to all employers. The last thing you want is to be battling a dispute in court with the Fair Work Commission.
Contact us or click below to learn more about iEngage.