PMFresh Pty Ltd T/A PMFresh

[2022] FWCA 2117

[2022] FWCA 2117

FAIR WORK COMMISSION

DECISION

Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021

cl.45, Schedule 1 of the Fair Work Act 2009

PMFresh Pty Ltd T/A PMFresh

(AG2021/8421)

PMFresh Pty Ltd (Colmslie Qld) and UWU Enterprise Agreement 2020

Food, beverages and tobacco manufacturing industry
COMMISSIONER HUNT	BRISBANE, 27 JUNE 2022

Application to vary PMFresh Pty Ltd (Colmslie Qld) and UWU Enterprise Agreement 2020 for casual employees

1. An application has been made for variation of the PMFresh Pty Ltd (Colmslie Qld) and UWU Enterprise Agreement 2020 (the Agreement) for casual employees pursuant to clause 45 of Schedule 1 of the Fair Work Act 2009 (the Act). The application has been made by PMFresh Pty Ltd T/A PMFresh (the Employer).

1. On 27 March 2021, the Act was amended by Schedule 1 to the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 (Cth) (Amending Act). The amendments included the introduction of a definition of ‘casual employee’ in section 15A of the Act, along with casual conversion arrangements in Division 4A of Part 2-2 of the Act.

1. Clause 45 of Schedule 1 of the Act provides as follows:

“45   Resolving uncertainties and difficulties about interaction between enterprise agreements and the definition of casual employee and casual conversion rights

(1)On application by an employer, employee or employee organisation covered by an enterprise agreement that was made before commencement, the FWC may make a determination varying the agreement:

(a) to resolve an uncertainty or difficulty relating to the interaction between the agreement and any of the following:

(i)the definition of casual employee in section 15A of the amended Act (including to deal with uncertainty or difficulty arising from the circumstances in which employees are to be employed as casual employees under the agreement);

(ii)the provisions of Division 4A of Part 2-2 of the amended Act; or

(b) to make the agreement operate effectively with that section or those provisions.

(2)A variation of an enterprise agreement under this clause operates from the day specified in the determination, which may be a day before the determination is made.”

1. I understand that the application made by the Employer pursuant to clause 45 of Schedule 1 of the Act is the first and only of its kind to the Commission.

Legislative definition of casual employee

1. The Act now provides the following definition of a casual employee at s.15A:

“Meaning of casual employee

(1)       A person is a casual employee of an employer if:

(a)       an offer of employment made by the employer to the person is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person; and

(b)       the person accepts the offer on that basis; and

(c)       the person is an employee as a result of that acceptance.

(2)       For the purposes of subsection (1), in determining whether, at the time the offer is made, the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person, regard must be had only to the following considerations:

(a)       whether the employer can elect to offer work and whether the person can elect to accept or reject work;

(b)       whether the person will work as required according to the needs of the employer;

(c)       whether the employment is described as casual employment;

(d)       whether the person will be entitled to a casual loading or a specific rate of   pay for casual employees under the terms of the offer or a fair work instrument.

Note: Under Division 4A of Part 2-2, a casual employee who has worked for an employer for at least 12 months and has, during at least the last 6 months of that time, worked a regular pattern of hours on an ongoing basis may be entitled to be offered, or request, conversion to full-time employment or part-time employment.

(3)       To avoid doubt, a regular pattern of hours does not of itself indicate a firm advance commitment to continuing and indefinite work according to an agreed pattern of work.

(4)       To avoid doubt, the question of whether a person is a casual employee of an employer is to be assessed on the basis of the offer of employment and the acceptance of that offer, not on the basis of any subsequent conduct of either party.

(5)       A person who commences employment as a result of acceptance of an offer of employment in accordance with subsection (1) remains a casual employee of the employer until:

(a) the employee's employment is converted to full-time or part-time employment under Division 4A of Part 2-2; or

(b)       the employee accepts an alternative offer of employment (other than as a casual employee) by the employer and commences work on that basis.”

The Agreement casual clause

1. The Agreement includes the following definition of a casual employee:

“19.1 (a)A Casual employee shall mean any employee engaged by the hour who may be put off or leave the Company’s service at any moment without notice.”

1. The Agreement then goes on to prescribe certain penalty rates and hours to be worked by casual employees, together with a casual conversion clause.

1. The Employer seeks for the insertion of all of the terms of s.15A of the Act to replace clause 19.1(a) of the Agreement, and not simply a cross-reference to the provisions in the Act.  The Employer urges this approach on account of the industrial history of the site where the work is performed, including an arbitrated matter before me with respect to a predecessor agreement. The Employer urges a “new era” of industrial comprehension, allowing for all relevant parties to have one source document to understand all industrial rules and arrangements, rather than requiring employees to refer to the Act to understand their entitlements.

Legislative casual conversion provisions

1. Division 4A of Part 2-2 of the Act now prescribes how an employee’s employment may be converted from casual employment to permanent full-time or part-time employment:

“Subdivision A –Application of Divvision

66A     Division applies to casual employees etc.

(1)       This Division applies in relation to an employee who is a casual employee.

(2)       A reference in this Division to full-time employment or part-time employment is taken not to include employment for a specified period of time, for a specified task or for the duration of a specified season.   

Subdivision B—Employer offers for casual conversion

66AA  Subdivision does not apply to small business employers

This Subdivision does not apply in relation to an employer that is a small business employer.

66B     Employer offers

(1)       Subject to section 66C, an employer must make an offer to a casual employee under this section if:

(a)       the employee has been employed by the employer for a period of 12 months beginning the day the employment started; and

(b)       during at least the last 6 months of that period, the employee has worked a regular pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to work as a full-time employee or a part-time employee (as the case may be).

Note:   An employee who meets the requirements of paragraphs (a) and (b) would also be a regular casual employee because the employee has been employed by the employer on a regular and systematic basis.

(2)       The offer must:

(a)       be in writing; and

(b)       be an offer for the employee to convert:

(i)           for an employee that has worked the equivalent of full-time hours during the period referred to in paragraph (1)(b)—to full-time employment; or

(ii)          for an employee that has worked less than the equivalent of full-time hours during the period referred to in paragraph (1)(b)—to part-time employment that is consistent with the regular pattern of hours worked during that period; and

(c)       be given to the employee within the period of 21 days after the end of the 12 month period referred to in paragraph (1)(a).

Note:   If an offer is accepted, the conversion to full-time employment or part-time employment has effect for all purposes (see section 66K).

(3)       For the purposes of paragraph (2)(b), in determining whether an award/agreement free employee has worked the equivalent of full-time hours, regard may be had to the hours of work of any other full-time employees of the employer employed in the same position as (or in a position that is comparable to) the position of the employee.        

66C     When employer offers not required

(1)       Despite section 66B, an employer is not required to make an offer under that section to a casual employee if:

(a)       there are reasonable grounds not to make the offer; and

(b)       the reasonable grounds are based on facts that are known, or reasonably foreseeable, at the time of deciding not to make the offer.

(2)       Without limiting paragraph (1)(a), reasonable grounds for deciding not to make an offer include the following:

(a)       the employee's position will cease to exist in the period of 12 months after the time of deciding not to make the offer;

(b)       the hours of work which the employee is required to perform will be significantly reduced in that period;

(c)       there will be a significant change in either or both of the following in that period:

(i)          the days on which the employee's hours of work are required to be performed;

(ii)         the times at which the employee's hours of work are required to be performed;

which cannot be accommodated within the days or times the employee is available to work during that period;

(d)       making the offer would not comply with a recruitment or selection process required by or under a law of the Commonwealth or a State or a Territory.

(3)       An employer must give written notice to a casual employee in accordance with subsection (4) if:

(a)       the employer decides under subsection (1) not to make an offer to the employee; or

(b)       the employee has been employed by the employer for the 12 month period referred to in paragraph 66B(1)(a) but does not meet the requirement referred to in paragraph 66B(1)(b).

Note:         If an employer fails to give notice to a casual employee, the employee has a residual right to request conversion to full-time or part-time employment in certain circumstances: see Subdivision C.

(4)       The notice must:

(a)       advise the employee that the employer is not making an offer under section 66B; and

(b)       include details of the reasons for not making the offer (including any grounds on which the employer has decided to not make the offer); and

(c)       be given to the employee within 21 days after the end of the 12 month period referred to in paragraph 66B(1)(a).

66D     Employee must give a response

(1)       The employee must give the employer a written response to the offer within 21 days after the offer is given to the employee, stating whether the employee accepts or declines the offer.

(2)       If the employee fails to give the employer a written response in accordance with subsection (1), the employee is taken to have declined the offer.

66E     Acceptances of offers

(1)       If the employee accepts the offer, the employer must, within 21 days after the day the acceptance is given to the employer, give written notice to the employee of the following:

(a)       whether the employee is converting to full-time employment or part-time employment;

(b)       the employee's hours of work after the conversion takes effect;

(c)       the day the employee's conversion to full-time employment or part-time employment takes effect.

(2)       However, the employer must discuss with the employee the matters the employer intends to specify for the purposes of paragraphs (1)(a), (b) and (c) before giving the notice.

(3)       The day specified for the purposes of paragraph (1)(c) must be the first day of the employee's first full pay period that starts after the day the notice is given, unless the employee and employer agree to another day.

Subdivision C—Residual right to request casual conversion

66F     Employee requests

(1)       A casual employee may make a request for an employer under this section if:

(a)       the employee has been employed by the employer for a period of at least 12 months beginning the day the employment started; and

(b)       the employee has, in the period of 6 months ending the day the request is given, worked a regular pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to work as a full-time employee or a part-time employee (as the case may be); and

(c)       all of the following applying:

(i)           the employee has not, at any time during the period referred to in paragraph (b), refused an offer made to the employee under section 66B;

(ii)          the employer has not, at any time during that period, given the employee a notice in accordance with paragraph 66C(3)(a) (which deals with notice of employer decisions not to make offers on reasonable grounds);

(iii)         the employer has not, at any time during that period, given a response to the employee under section 66G refusing a previous request made under this section;

(iv)         if the employer is not a small business employer--the request is not made during the period of 21 days after the period referred to in paragraph 66B(1)(a).

Note:         Nothing in this Subdivision prevents an employee from requesting to convert to full-time or part-time employment outside the provisions of this Division, or prevents an employer from granting such a request.

(2)       The request must:

(a)       be in writing; and

(b)       be a request for the employee to convert:

(i)          for an employee that has worked the equivalent of full-time hours during the period referred to in paragraph (1)(b)--to full-time employment; or

(ii)         for an employee that has worked less than the equivalent of full-time hours during the period referred to in paragraph (1)(b)--to part-time employment that is consistent with the regular pattern of hours worked during that period; and

(c)       be given to the employer.

Note:         If a request is accepted, the conversion to full-time employment or part-time employment has effect for all purposes (see section 66K).

(3)       For the purposes of paragraph (1)(b), in determining whether an award/agreement free employee has worked the equivalent of full-time hours, regard may be had to the hours of work of any other full-time employees of the employer employed in the same position as (or in a position that is comparable to) the position of the employee.

66G     Employer must give a response

The employer must give the employee a written response to that request within 21 days after the request is given to the employer, stating whether the employer grants or refuses the request.

66H     Refusals of requests

(1)       The employer must not refuse the request unless:

(a)       the employer has consulted the employee; and

(b)       there are reasonable grounds to refuse the request; and

(c)       the reasonable grounds are based on facts that are known, or reasonably foreseeable, at the time of refusing the request.

(2)       Without limiting paragraph (1)(b), reasonable grounds for refusing the request include the following:

(a)       it would require a significant adjustment to the employee’s hours of work in order for the employee to be employed as a full-time employee or part-time employee;

(b)       the employee’s position will cease to exist in the period of 12 months after giving the request;

(c)       the hours of work which the employee is required to perform will be significantly refused in the period of 12 months after giving the request;

(d)       there will be a significant change in either or both of the following in the period of 12 months after giving the request:

(i)           the days on which the employee’s hours of work are required to be performed;

(ii)          the times at which the employee’s hours of work are required to be performed;

which cannot be accommodated within the days or times the employee is available to work during that period;

(e)       granting the request would not comply with a recruitment or selection process required by or under a law of the Commonwealth or a State or a Territory.

(3)       If the employer refuses the request, the written response under section 66G must include details of the reasons for the refusal.

66J     Grants of requests

(1)       If the employer grants the request, the employer must, within 21 days after the day the request is given to the employer, give written notice to the employee of the following:

(a)       whether the employee is converting to full-time employment or part-time employment;

(b)       the employee’s hours of work after the conversion takes effect;

(c)       the day the employee’s conversion to full-time employment or part-time employment takes effect.

(2)       However, the employer must discuss with the employee the matters the employer intends to specify for the purposes of paragraphs (1)(a), (b) and (c) before giving the notice.

(3)       The day specified for the purposes of paragraph (1)(c) must be the first day of the employee’s first full pay period that starts after the day the notice is given, unless the employee and employer agree to another day.

(4)       To avoid doubt, the notice may be included in the written response under section 66G.

Subdivision D—Other provisions

66K     Effect of conversion

To avoid doubt, an employee is taken, on and after the day specified in a notice for the purposes of paragraph 66E(1)(c) or 66J(1)(c), to be a full-time employee or part-time employee of the employer for the purposes of the following:

(a)  this Act and any other law of the Commonwealth;

(b)  a law of a State or Territory;

(c)  any fair work instrument that applies to the employee;

(d)  the employee's contract of employment.

66L     Other rights and obligations

(1)       An employer must not reduce or vary an employee's hours of work, or terminate an employee's employment, in order to avoid any right or obligation under this Division.

Note: The general protections provisions in Part 3-1 also prohibit the taking of adverse action by an employer against an employee (which includes a casual employee) because of a workplace right of the employee under this Division.

(2)       Nothing in this Division:

(a)       requires an employee to convert to full-time employment or part-time employment; or

(b)       permits an employer to require an employee to convert to full-time employment or part-time employment; or

(c)       requires an employer to increase the hours of work of an employee who requests conversion to full-time employment or part-time employment under this Division.

66M     Disputes about the operation of this Division

Application of this section

(1)       This section applies to a dispute between an employer and employee about the operation of this Division.

(2)       However, this section does not apply in relation to the dispute if any of the following includes a term that provides a procedure for dealing with the dispute:

(a)       a fair work instrument that applies to the employee;

(b)       the employee's contract of employment;

(c)       another written agreement between the employer and employee.

Note:         Modern awards and enterprise agreements must include a term that provides a procedure for settling disputes in relation to the National Employment Standards (see paragraph 146(b) and subsection 186(6)).

Resolving disputes

(3)       In the first instance, the parties to the dispute must attempt to resolve the dispute at the workplace level, by discussions between the parties.

FWC may deal with disputes

(4)       If discussions at the workplace level do not resolve the dispute, a party to the dispute may refer the dispute to the FWC.

(5)       If a dispute is referred under subsection (4):

(a)  the FWC must deal with the dispute; and

(b)  if the parties notify the FWC that they agree to the FWC arbitrating the dispute--the FWC may deal with the dispute by arbitration.

Note:         For the purposes of paragraph (a), the FWC may deal with the dispute as it considers appropriate, including by mediation, conciliation, making a recommendation or expressing an opinion (see subsection 595(2)).

Representatives

(6)       The employer or employee to the dispute may appoint a person or industrial association to provide the employer or employee (as the case may be) with support or representation for the purposes of resolving, or the FWC dealing with, the dispute.

Note:         A person may be represented by a lawyer or paid agent in a matter before the FWC only with the permission of the FWC (see section 596).”

The Agreement casual conversion clause

1. The Agreement provides the following casual conversion clause:

“19.4 Casual conversion to full-time or part-time employment

(a)A Casual employee, other than an irregular casual employee, who has been engaged by the Company for a sequence of periods of employment under this Agreement during a period of nine (9) months, thereafter has the right to elect to have their contract of employment converted to Permanent Full- time or Permanent Part-time employment, subject to a permanent position being available, if the employment is to continue beyond the 6 month pre-condition service period.

(b)The Company must give the employee notice in writing of the provisions of clause 19.4 within four weeks of the employee having attained such period of  nine (9) months.  The employee retains their right of election under clause 19.4(a) if the Company fails to comply with clause 19.4(b).

(c)Any such casual employee who does not within four weeks of receiving written notice elect to convert their contract of employment to full-time or part-time employment is deemed to have elected against any such conversion.

(d)Any Casual employee who has a right to elect under clause 19.4(a), on receiving notice under clause 19.4(b) or after the expiry of the time for giving

such notice, may give four weeks’ notice in writing to the Company that they seek to elect to convert their contract of employment to full- time or part-time employment, and within four weeks of receiving such notice the Company must consent to or refuse the election but must not unreasonably so refuse.

(e)Once a casual employee has elected to become and been converted to a full time or part- time employee, the employee may only revert to casual employment by written agreement with the Company.

(f)If a casual employee has elected to have their contract of employment converted to full-time or part-time employment in accordance with clause 19.4(d), the Company and employee must, subject to clause 19.4(d), discuss and agree on:

(i)which form of employment the employee will convert to, being full-time or part-time; and

(ii)if it is agreed that the employee will become a part-time employee, the number of hours and the pattern of hours that will be worked, will be as set out in the Part-time Employee provisions of this Agreement.

(g)An employee who has worked on a full-time basis throughout the period of casual employment has the right to elect to convert their contract of employment to full-time employment and an employee who has worked on a part-time basis during the period of casual employment has the right to elect to convert their contract of employment to part-time employment, on the basis of the same number of hours and times of work as previously worked, unless other arrangements are agreed on between the Company and employee.

(h)Following such agreement being reached, the employee converts  to  full-time  or  part-  time employment.

(i)Where, in accordance with clause 19.4(d) the Company refuses  an election  to convert,  the reasons for doing so must be fully stated to and discussed with the  employee  concerned and a genuine attempt made to reach agreement.

(j)By agreement between the Company and the majority of the employees in the relevant workplace or a section or sections of it, or with the casual employee concerned, the Company may apply clause 19.4(a) as if the reference to nine months is a reference to 12 months, but only in respect of a currently engaged individual employee or group of employees. Any such agreement reached must be kept by the Company as a time and wages record. Any such agreement reached with an individual employee may only be reached within the two months prior to the period of nine months referred to in clause 19.4(a).

(k)For the purposes of clause 19.4, an irregular casual employee is one who has been engaged to perform work on an occasional or non-systematic or irregular basis.

(l)An employee must not be engaged and re-engaged to avoid any obligation under this agreement.”

1. Again, the Employer seeks for the insertion of a comprehensive clause to replace clause 19.4 of the Agreement, and not simply a cross-reference to the provisions in the Act.  The Employer urges this approach as it considers that the simple inclusion of a statutory cross-reference is insufficient in this instance to ensure clarity and certainty for the parties with respect to the new statutory casual employee provisions and how they are to operate as part of the Agreement.

Legislative requirement for review of modern awards

1. The Amending Act also required the Commission to review modern awards where awards contained a definition of casual employment or prescribed casual conversion, to ensure the relevant term in the modern award was consistent with the new provisions of the Act, or if there was any uncertainty or difficulty relating to the interaction between the award and the Act.  The Commission was tasked with completing the review of all relevant modern awards by 27 September 2021 (the Casual Terms Award Review 2021).

1. The Commission formed a five-member Full Bench to consider the nature and scope of the review required by clause 48 of Schedule 1 to the Act and to review the initial group of awards.  In the second stage of the review, a three-member Full Bench reviewed the remaining modern awards.[1]

1. On 16 July 2021, the five-member Full Bench stated the following:[2]

“[39] As to the expression ‘any uncertainty or difficulty relating to the interaction between the award and the Act so amended’, in cl.48(2)(b) and ‘a difficulty or uncertainty relating to the interaction between the award and the Act as so amended’ in cl.48(3)(b), the words ‘uncertainty’ and ‘difficulty’ should be given their ordinary meaning.”

1. The vast majority of awards were amended to delete the casual conversion clause with the following clause inserted:

“Offers and requests for conversion from casual employment to full-time or part-time employment are provided for in the NES.

NOTE: Disputes about offers and requests for casual conversion under the NES are to be dealt with under clause [xx]—Dispute resolution.”

1. Prior to the Casual Terms Award Review 2021, the Manufacturing and Associated Industries and Occupations Award 2020 (the Manufacturing Award) contained a distinct casual conversion clause, allowing for casual conversion for regular and systematic casual employees at six months as opposed to the typical 12 months in most other awards.  At the commencement of the Full Bench considerations, the following questions were posed for the industrial parties to the Manufacturing Award:  

1.   Is the Manufacturing Award casual conversion clause more beneficial than the residual right to request casual conversion under the NES for casual employees employed for less than 12 months, but detrimental in some respects in comparison to the NES for casual employees employed for 12 months or more?

2.   For the purposes of Act Schedule 1 cl.48(2):

·  is the Manufacturing Award casual conversion clause consistent with the Act as amended, and

·  does the clause give rise to uncertainty or difficulty relating to the interaction between the award and the Act as amended?

3.   For the purposes of Act Schedule 1 cl.48(3), would confining the Manufacturing Award clause to casual employees with less than 12 months of employment and redrafting it as a clause that just supplements the casual conversion NES, make the award consistent or operate effectively with the Act as amended?

1. Submissions were made by relevant unions and employer associations.  The Full Bench made the following decision:[3]

“[236] We confirm the provisional views we expressed in relation to the first 2 questions. In respect of the first question, nothing put before us has dissuaded us that the Manufacturing Award is less beneficial than the residual right to conversion now provided for in the NES in the 4 respects identified in our provisional view. Further, although we identified that the Manufacturing Award is more beneficial than the NES insofar as it allows a request for conversion to be made after only 6 months’ casual employment, it is not clear that this benefit is of the degree of significance assumed in the submissions of the AMWU and the other unions. Eligibility for the NES entitlement under s.66F(1)(a) arises after 12 months’ employment simpliciter, whereas under cl.11.5(a) of the Manufacturing Award eligibility to request conversion only arises after 6 months’ regular casual employment (or, more precisely, 6 months’ casual employment other than as an irregular casual employee, defined in cl.11.5(k) as an employee engaged to perform work on an occasional or non-systematic or irregular basis). Thus, eligibility under the award will only arise after 6 months’ employment if the casual employment has the features of regularity from the very outset. Experience would tend to suggest that this may not be common. There is no evidence before the Commission of the extent to which casual employees covered by the Manufacturing Award have historically exercised the award entitlement to request conversion after only 6 months’ employment, or before 12 months’ employment has been reached – or, indeed, the extent to which the entitlement is exercised at all.

[237] We do not accept the CFMMEU’s submission that the Manufacturing Award casual clause is comparable to the provisions requiring employers to offer casual conversion in Subdivision B of Division 4A of Part 2-2 of the Act. Clause 11.5 of the Manufacturing Award does not contain any obligation on employers to offer conversion and, to the extent that the provision confers an entitlement to elect rather than to request conversion, this is a difference in form only since the employer retains the right to refuse the election under cl.11.5(i). The fact that Division 4A provides in Subdivision B for an obligation for the employer to offer conversion in prescribed circumstances, for which there is no equivalent in the Manufacturing Award, and well as providing in Subdivision C for a residual right to request conversion, demonstrates the extent to which the suite of conversion entitlements now provided for in Division 4A is more beneficial to employees than cl.11.5 of the Manufacturing Award. This is an important consideration to which we will later return.

[238] In relation to the second question, there appears to be no contest that cl.11.5 of the Manufacturing Award conflicts with the NES residual right to convert. As properly conceded by the AMWU, this arises in at least 2 ways. First, the facilitative provision in cl.11.5(j) allows for the requirement for 6 months’ regular casual employment to be extended to 12 months by majority agreement. This indubitably brings the operation of the award clause within the same field as the NES entitlement. Second, as just explained, the prerequisite for 6 months’ regular casual employment in the award may not be achieved in any event until after 12 months’ employment in total, meaning again that the field of operation of the award clause will overlap with the NES. When this occurs, the employer will be faced with compliance with different and competing conversion requirements, and the operation of the award provision in that context will ‘alter, impair or detract from’, and thus be inconsistent with, the NES.  Further, there can be no serious question that, by reason of the same circumstance, there would be uncertainty and difficulty concerning the interaction between the award and the NES. It is sufficient in this respect to refer to the position faced by the employer when responding to a conversion election/request that the employer cannot agree to: under cl.11.5, the employer must respond within 4 weeks, need not do so in writing but must fully state the reasons for refusal, and then engage in a genuine attempt to reach agreement with the employee. By contrast, under the NES the employer must respond within 21 days, the response must be in writing, the details of the reasons must be included in the response, the refusal must follow (not precede) consultation with the employee, and the reasonable grounds for refusal must be based on facts that are known, or reasonably foreseeable, at the time of refusing the request. It may not be impossible to find a narrow route to simultaneous compliance with both sets of obligations, but there can be no doubt that difficulty and confusion would result for employers and employees.

[239] The AMWU and the other union parties all accepted that cl.11.5 could not be retained in its current form. As the ACTU identified, 3 proposals have been advanced for the variation of cl.11.5, but we do not consider any of them to be satisfactory. The approach advanced by the CFMMEU and supported by the AMWU to remove the ability to extend the qualifying period of regular casual employment provision in cl.11.5(j) to 12 months suffers from 2 major deficiencies:

(1) It would fundamentally imbalance the clause by removing only a provision of benefit to employers. As submitted by the Ai Group, we do not consider that it would be fair to ‘cherry pick’ the clause in order to ‘save’ particular aspects of it that might be considered to be beneficial to employees. Moreover, to the extent that the unions rely upon a presumption said to exist that cl.11.5 achieves the modern awards objectives (a contention to which we will return), that reliance is vitiated if the clause is modified in a way which significantly alters the way in which it seeks to balance the interests of employers and employees.

(2) The CFMMEU’s approach would not resolve the inconsistency problem in any event because, as the AMWU accepted, a casual employee still might not reach the award prerequisite of 6 months’ regular casual employment until on or after 12 months’ employment in total, in which case both the award and NES entitlements and obligations would be activated. To deal with this, the AMWU suggested a further change whereby cl.11.5 would be ‘ring fenced’ to only operate in the first 12 months’ of employment. This would constitute a further major change which would take the clause even further from its original form.

[240] The second and third alternatives amount, in effect, to the same thing. The AMWU’s proposed new clause constitutes an attempt to reproduce the entirety of the NES provisions concerning the residual right to request casual conversion into the Manufacturing Award, with the modification that the right becomes available after 6 months’ rather than 12 months’ employment. The other option of incorporating the NES provisions into the award by reference, with the 12 months in s.66F(1)(a) being read as 6 months, may be a more elegant drafting solution, but is no different in ultimate effect. Neither alternative involves preservation of the existing provision, but rather the establishment of a new regime of award obligations merely for the sake of ‘saving’ one element of the existing provision, namely the eligibility criterion of 6 months’ regular casual employment.

[241] Turning directly to the third provisional view, we confirm our view that redrafting cl.11.5 to incorporate the residual right of conversion under the Act, but on the basis that an employee is eligible to make a request after 6 months’ employment, would make the award consistent and operate effectively with the Act. However we consider that cl.11.5 redrafted in this way would not be necessary to meet the modern award objective, as required by s.138. Clause 11.5 has its origins in the casual conversion clause inserted into the Metal, Engineering and Associated Industries Award, 1998 by a Full Bench of the AIRC in 2000 in the context of a full review of the award’s casual employment provisions.  In awarding this provision the Full Bench said:

‘We consider that a compelling case has been established for some measure to be introduced in the Award to discourage the trend toward the use of permanent casuals. We have determined in favour of a process requiring election rather than one of setting a maximum limit to engagements. Such process should create room for the individual employee’s perception of the best option to operate. It will also promote employee and employer understanding of whatever mutual problems may exist in accommodating an election.

We acknowledge the force in the points made for and against a maximum time limit of any particular duration. As an exercise of judgment, we have adopted a six month period for election, extendable to 12 months. There has not been an award provision for a maximum engagement in this industry. We acknowledge the existence of relevant precedents for shorter maximum periods of engagement of casuals. We would expect, on the basis of the statistical material, that a high proportion of casual engagements are completed within four to eight weeks. However, in selecting six months, we take into account what we consider to be the potential adverse impact on younger and less advantaged employees of having a lower limit. On balance, we favour an approach which builds time and an opportunity to consider and discuss into the conversion process. In our view, a provision of the kind is the best compromise between the competing interests and considerations arrayed in the argument about the AMWU’s claim. We have matched, in part, the wording of subregulation 30B(3) for the purpose of identifying a regular and systematic sequence of periods of employment. We may not by ourselves have arrived at or chosen that wording for a test. Common wording would appear however to have longer term advantages in promoting a consistency of approach. We envisage that the variation would take effect from a prospective date some three months after the date of the order.’ 

[242] It is apparent from the above passage that, in establishing the casual conversion provisions, the Full Bench was endeavouring to strike a careful balance between the competing interests at stake in the matter. This is particularly the case with adoption of the ‘six month period for election, extendable to 12 months’. And the decision was of course made in a context where there were no statutory or award restrictions on the use of casual employees by employers covered by the award.

[243] In the award modernisation process required by Part 10A of the Workplace Relations Act 1996, the Full Bench of the AIRC which conducted the process, determined to retain casual conversion clauses where they constituted an industry standard.  On this basis, the award provision made in 2000 was included, basically unchanged, in the Manufacturing Award. Again, at that time, there was no statutory restriction on the use of casual employment by employers, so that the pre-existing casual conversion clause was the only protective scheme in the relevant industry sector.

[244] In the 4-yearly review of modern awards, the AMWU sought the modification of the casual conversion provision in the Manufacturing Award so that casual employees were deemed to be permanent employees after a qualification period unless they chose to opt out. The AMWU’s application in this respect was not granted by the Full Bench which, in the same decision, established the model casual conversion clause.  In the wake of this decision, no party covered by the Manufacturing Award expressed interest in adopting the model clause in that award, and so the existing clause continued.

[245] Having regard to this historical context, we do not consider that the contention that the existing clause in the Manufacturing Award presumptively achieves the modern award objective has substance in this Review, for 2 reasons. First, the relevant statutory context has entirely changed. The clause was established and maintained in a context where there were no other restrictions or controls on the use of casual employment. Now, as we have stated earlier, the new NES provisions establish a suite of casual conversion entitlements which, taken as a whole, are superior to cl.11.5 for employees. That by itself is sufficient to displace the presumption. Second, as earlier stated, all parties accept that cl.11.5 cannot be maintained in its current form, so the alleged presumption is in any event of little relevance.

[246] We consider that the first alternative approach identified in the third provisional view would not achieve the modern awards objective in s.134(1). Fundamentally, it would not be fair to substantially modify cl.11.5 in a way which would ‘cherry pick’ one existing provision of benefit to employees for preservation and thereby discard the careful balance struck by the AIRC in 2000, nor would doing so be relevant to the current statutory context. Further, we consider that establishing a Manufacturing Award entitlement in parallel with the NES, but with a modified eligibility period, would increase the regulatory burden on employers and make the award system more complex and less easy to understand, with the result that we consider that the considerations in paragraphs (f) and (g) in s.134(1) would weigh significantly against making the proposed variation to cl.11.5. The other considerations in s.134(1) we consider to be neutral. Accordingly, varying cl.11.5 in the manner proposed in the third provisional view would not meet the requirement in s.138.

[247] Accordingly, we will take the second approach identified in the third provisional view and entirely delete cl.11.5 (and 11.6) from the Manufacturing Award and replace them with a reference to the NES casual conversion entitlements. This variation will satisfy the requirement in cl.48(3) of Schedule 1. We do so on the basis of our assessment that the casual conversion NES, considered as a whole, provides a scheme of entitlements for employees which is more beneficial to them than that provided by cl.11.5 as it operated prior to the commencement of the Amending Act.” [references omitted]

1. The clause at [15] of this decision was inserted into the Manufacturing Award with effect from 27 September 2021.

The variation sought by the Employer

1. The Employer seeks to vary the Agreement by amending clause 19 by inserting a new clause 19.1A, before clause 19.1, to read as follows:

“19.1A.  Meaning of casual employee

(a)       A person is a casual employee of the employer if:

(i)        an offer of employment made by the employer to the person is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person; and

(ii)       the person accepts the offer on that basis; and

(iii)      the person is an employee as a result of that acceptance.

(b)       For the purposes of sub-clause (a), in determining whether, at the time the offer is made, the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person, regard must be had only to the following considerations:

(i)        whether the employer can elect to work and whether the person can elect to accept or reject work;

(ii)       whether the person will work as required according to the needs of the employer;

(iii)      whether the employment is described as casual employment;

(iv)      whether the person will be entitled to a casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument.

Note 1: Under Division 4A of Part 2-2 Fair Work Act 2009, a casual employee who has worked for the employer for at least 12 months and has, during at least the last 6 months of that time, worked a regular pattern of hours on an ongoing basis may be entitled to be offered, or request, conversion to full-time employment or part-time employment.

Note 2: Further to Note 1., the provisions set out in clause 19.4 Casual conversion to full-time or part-time employment of this Agreement are consistent with the above referred to statutory provisions.

(c)       To avoid doubt, a regular pattern of hours does not of itself indicate a firm advance commitment to continuing and indefinite work according to an agreed pattern of work.

(d)       To avoid doubt, the question of whether a person is a casual employee of the employer is to be assessed on the basis of the offer of employment and the acceptance of that offer, not on the basis of any subsequent conduct of either party.

(e)       A person who commences employment as a result of acceptance of an offer of employment in accordance with sub-clause 19.1A.(a) remains a casual employee of the employer until:

(i)        the employee’s employment is converted to full-time or part-time employment in accordance with clause 19.4 of this Agreement; or

(ii)       the employee accepts an alternative offer of employment (other than as a casual employee) by the employer and commences work on that basis.”

1. The Employer further seeks to vary the Agreement by deleting clause 19.1(a) of the Agreement, which contained the definition of casual employee, and by further amending the Agreement by re-numbering provisions of clauses 19.1(b), 19.1(c) and 19.1(d) to become the new 19.1(a), 19.1(b) and 19.1(c) respectively.

1. In addition, the Employer applies to delete the existing provisions of clause 19.4 of the Agreement and inserting in lieu a new sub-clause 19.4 to read as follows:

“19.4     Casual conversion to full-time or part-time employment

19.4.1  Employer offers

(1)       Subject to clause 19.4.2, the employer must make an offer to a casual employee under this section if:

(a)       the employee has been employed by the employer for a period of 12 months beginning the day the employment started; and

(b)       during at least the last 6 months of that period, the employee has worked a regular pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to work as a full-time employee or a part-time employee (as the case may be).

Note:   An employee who meets the requirements of paragraph (a) and (b) above, would also be a regular casual employee because the employee has been employed by the employer on a regular and systematic basis.

(2)       The offer must:

(a)be in writing; and

(b)be an offer for the employee to convert:

(i)           for an employee that has worked the equivalent of full-time hours during the period referred to in paragraph 19.4.1(1)(b) – to full-time employment; or

(ii)          for an employee that has worked less than the equivalent of full-time hours during the period referred to in paragraph 19.4.1(1)(b) – to part-time employment that is consistent with the regular pattern of hours worked during that period and which is in accordance with the applicable ordinary hours of work for part-time employees criteria set out in either clause 21.3 (for dayworker) or clause 24.3 (for shiftwork); and

(c)       be given to the employee within the period of 21 days after the end of the 12 month period referred to in paragraph 19.4.1(1)(a).

Note:   If an offer is accepted, the conversion to full-time employment or part-time employment has effect for all purposes (see clause 19.4.10).

19.4.2  When employer offers not required

(1)       Despite clause 19.4.1, the employer is not required to make an offer under that section to a casual employee if:

(a)       there are reasonable grounds not to make the offer; and

(b)       the reasonable grounds are based on facts that are known, or reasonably foreseeable, at the time of deciding not to make the offer.

(2)       Without limiting paragraph 19.4.2(1)(a), reasonable grounds for deciding not to make an offer include the following:

(a)       the employee's position will cease to exist in the period of 12 months after the time of deciding not to make the offer;

(b)       the hours of work which the employee is required to perform will be significantly reduced in that period;

(c)       there will be a significant change in either or both of the following in that period:

(i)          the days on which the employee's hours of work are required to be performed;

(ii)         the times at which the employee's hours of work are required to be performed;

which cannot be accommodated within the days or times the employee is available to work during that period;

(d)       making the offer would not comply with a recruitment or selection process required by or under a law of the Commonwealth or the State of Queensland.

(3)       An employer must give written notice to a casual employee in accordance with paragraph 19.4.2(4) below if:

(a)       the employer decides under paragraph 19.4.2(1) not to make an offer to the employee; or

(b)       the employee has been employed by the employer for the 12 month period referred to in paragraph 19.4.1(1)(a) but does not meet the requirement referred to in paragraph 19.4.1(1)(b).

Note:   If the employer fails to give notice to a casual employee, the employee has a residual right to request conversion to full-time or part-time employment in certain circumstances: see clauses 19.4.5 to 19.4.8.

(4)       The notice must:

(a)       advise the employee that the employer is not making an offer under clause 19.4.1; and

(b)       include details of the reasons for not making the offer (including any grounds on which the employer has decided to not make the offer); and

(c)       be given to the employee within 21 days after the end of the 12 month period referred to in paragraph 19.4.1(1)(a).

19.4.3 Employee must give a response

(1)       The employee must give the employer a written response to the offer within 21 days after the offer is given to the employee, stating whether the employee accepts or declines the offer.

(2)       If the employee fails to give the employer a written response in accordance with paragraph 19.4.3(1), the employee is taken to have declined the offer.

19.4.4 Acceptances of offers

(1)       If the employee accepts the offer, the employer must, within 21 days after the day the acceptance is given to the employer, give written notice to the employee of the following:

(a)       whether the employee is converting to full-time employment or parttime employment;

(b)       the employee's hours of work after the conversion takes effect;

(c)       the day the employee's conversion to full-time employment or parttime employment takes effect.

(2)       However, the employer must discuss with the employee the matters the employer intends to specify for the purposes of paragraphs 19.4.4(1)(a), (b) and (c) before giving the notice.

(3)       The day specified for the purposes of paragraph 19.4.4(1)(c) must be the first day of the employee's first full pay period that starts after the day the notice is given, unless the employee and employer agree to another day.

19.4.5 Employee requests

(1)       A casual employee may make a request of the employer if:

(a)       the employee has been employed by the employer for a period of at least 12 months beginning the day the employment started; and

(b)       the employee has, in the period of 6 months ending the day the request is given, worked a regular pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to work as a full-time employee or a part-time employee (as the case may be); and

(c)       all of the following apply:

(i)          the employee has not, at any time during the period referred to in paragraph 19.4.5(b), refused an offer made to the employee under clause 19.4.1;

(ii)         the employer has not, at any time during that period, given the employee a notice in accordance with paragraph 19.4.2(3)(a) (which deals with notice of employer decisions not to make offers on reasonable grounds);

(iii)        the employer has not, at any time during that period, given a response to the employee under clause 19.4.6 refusing a previous request made under this clause (19.4.5);

(iv)        [given the employer is not a small business employer] – the request is not made during the period of 21 days after the period referred to in paragraph 19.4.1(1)(a).

Note:   Nothing in clauses 19.4.5 to 19.4.8 prevents an employee from requesting to convert to full-time or part-time employment outside the provisions of this clause 19.4, or prevents an employer from granting such a request.

(2)       The request must:

(a)       be in writing; and

(b)       be a request for the employee to convert:

(i)          for an employee that has worked the equivalent of full-time hours during the period referred to in paragraph 19.4.5(1)(b) - to full-time employment; or

(ii)         for an employee that has worked less than the equivalent of full-time hours during the period referred to in paragraph 19.4.5 (1)(b) - to parttime employment that is consistent with the regular pattern of hours worked during that period and which is in accordance with the applicable ordinary hours of work for part-time employees criteria set out in either clause 21.3 (for daywork) or clause 24.3 (for shiftwork); and

(c) be given to the employer.

Note: If a request is accepted, the conversion to full-time employment or part-time employment has effect for all purposes (see clause 19.4.9).

19.4.6 Employer must give a response

The employer must give the employee a written response to the request within 21 days after the request is given to the employer, stating whether the employer grants or refuses the request.

19.4.7 Refusals of requests

(1)       The employer must not refuse the request unless:

(a)       the employer has consulted the employee; and

(b)       there are reasonable grounds to refuse the request; and

(c)       the reasonable grounds are based on facts that are known, or reasonably foreseeable, at the time of refusing the request.

(2) Without limiting paragraph 19.4.7(1)(b), reasonable grounds for refusing the request include the following:

(a)       it would require a significant adjustment to the employee's hours of work in order for the employee to be employed as a full-time employee or part-time employee;

(b)       the employee's position will cease to exist in the period of 12 months after giving the request;

(c)       the hours of work which the employee is required to perform will be significantly reduced in the period of 12 months after giving the request;

(d)       there will be a significant change in either or both of the following in the period of 12 months after giving the request:

(i) the days on which the employee's hours of work are required to be performed;

(ii) the times at which the employee's hours of work are required to be performed;

which cannot be accommodated within the days or times the employe is available to work during that period;

(e)       granting the request would not comply with a recruitment or selection process required by or under a law of the Commonwealth or a State or a Territory.

(3)       If the employer refuses the request, the written response under clause 19.4.6 must include details of the reasons for the refusal.

19.4.8 Grants of requests

(3)If the employer grants the request, the employer must, within 21 days after the day the request is given to the employer, give written notice to the employee of the following:

(a) whether the employee is converting to full-time employment or parttime employment;

(b)       the employee's hours of work after the conversion takes effect;

(c)       the day the employee's conversion to full-time employment or parttime employment takes effect.

(2)       However, the employer must discuss with the employee the matters the employer intends to specify for the purposes of paragraphs 19.4.8(1)(a), (b) and (c) before giving the notice.

(3)       The day specified for the purposes of paragraph 19.4.8 (1)(c) must be the first day of the employee's first full pay period that starts after the day the notice is given, unless the employee and employer agree to another day.

(4)       To avoid doubt, the notice may be included in the written response under clause 19.4.6.

19.4.9 Effect of conversion

To avoid doubt, an employee is taken, on and after the day specified in a notice for the purposes of paragraph 19.4.4(1)(c) or 19.4.8(1)(c), to be a full-time employee or part-time employee of the employer for the purposes of the following:

(a)       the Act and any other law of the Commonwealth;

(b)       a law of the State of Queensland;

(c)       any fair work instrument that applies to the employee;

(d)       the employee's contract of employment.

19.4.10 Other rights and obligations

(1)       The employer must not reduce or vary an employee's hours of work, or terminate an employee's employment, in order to avoid any right or obligation under this clause 19.4.

Note: The general protections provisions in Part 3-1 Fair Work Act also prohibit the taking of adverse action by an employer against an employee (which includes a casual employee) because of a workplace right of the employee under this clause 19.4.

(2)       Nothing in this clause 19.4:

(a)       requires an employee to convert to full-time employment or parttime employment; or

(b)       permits an employer to require an employee to convert to full-time employment or part-time employment; or

(c)       requires an employer to increase the hours of work of an employee who requests conversion to full-time employment or part-time employment under this clause 19.4.

19.4.11 Disputes about the operation of this Division

A dispute between the employer and an employee about the operation of this clause 19.4 shall be dealt with in accordance with the provisions of Clause 12. DISPUTE RESOLUTION of this Agreement.

Hearing

1. On 28 February 2022, I convened a hearing.  Mr Stephen McCarthy, Partner of Holman Webb Lawyers was granted leave and appeared for the Employer together with Mr Henry Segerius, GM Employee Relations and Safety of the Employer.  Ms Julia Lee, Industrial Officer appeared for the United Workers Union (UWU).  

Employer’s submissions

1. The Employer submitted that the Commission should vary the Agreement to insert the Act’s provisions in place of the current Agreement’s provisions for the following reasons: 

·  Under the Agreement, a casual employee with 9 months of employment, who is not an irregular casual employee, has only a “one-off right” to elect conversion.

·  Under the Acts provisions, a casual employee with 12 months of employment with an employer has:

(i)A right to be offered casual conversion;

(ii)Separately may be entitled to request casual conversion; and

(iii)These rights or entitlements are on-going or residual and therefore not a “one-off” entitlement.

1. The Employer submitted that it would appear that at present, by application of the Agreement and the Act, the Employer needs to comply with the Agreement by recognising an employee’s “one-off right” to request casual conversion after 9 months of employment, and then must comply with the Act by offering conversion after 12 months of employment. 

1. The Employer referred to the Full Bench consideration in the Casual Terms Award Review 2021 relevant to the Food, Beverage and Tobacco Manufacturing Award 2020 (the Food Award), noting it is the relevant underpinning award at the site where the work is performed.  The Food Award also contained a conversion clause at six months instead of 12 months.

1. The Full Bench determined in its decision of 13 September 2021:[4]

“[51] It is necessary at the outset to recall that the task at hand is to conduct the review of casual award terms required by clause 48 of Schedule 1 of the Act. Where a modern award contains a relevant casual term of the type specified in clause 48(1)(c) which is not consistent or gives rise to interaction difficulty or uncertainty with the Act, clause 48(3) requires the Commission to make a determination varying the award to make the award consistent or operate effectively with the Act. We have earlier set out the 9 key findings made by the Full Bench in the July 2021 decision which caused it to conclude that the casual conversion provision in clause 11.5 of the Manufacturing Award should be deleted and replaced with a reference to the NES casual conversion provisions. No party has challenged or asked us to revisit findings (4) and (5), namely that clause 11.5 is not consistent and gives rise to interaction difficulty and uncertainty with the Act. That means that a variation to the Manufacturing Award is required by clause 48(3) and, again, there is no challenge to finding (6) that clause 11.5 of the Manufacturing Award cannot stay as it is. There is also no challenge to finding (9) that the course which the Full Bench determined to take in the July 2021 decision would remove the inconsistency and interaction difficulty. All these findings would apply equally to the casual conversion provisions in the 12 awards we are considering here, which are the same or virtually the same as clause 11.5 of the Manufacturing Award, and no party suggested otherwise.

[52] That being the case, the only question we need to consider is whether there is some alternative course which we should take to remove the accepted inconsistency and interaction difficulty in the 12 awards other than that taken in the July 2021 decision and preferred in our provisional views. This review is not an opportunity to engage in some broader assessment of casual employment in the industries covered by the awards in question and to consider award variations to address what are contended by the union parties to be detriments to employees arising from the (alleged) increasing use of casual employment in those industries. We note that a broad and detailed consideration of casual employment was conducted in the Part-time and casual employment common issue proceedings as part of the 4 yearly review of modern awards, and the principal outcome of those proceedings was the development of a model casual conversion clause with a 12-month qualification period, with the model clause being inserted in the large majority of modern awards. We further note that it remains open to any of the union parties which have made submissions in this matter to make an application pursuant to s.158(1) of the Act, supported by a proper merits case, to vary one or more modern awards to address some of the broader issues concerning casual employment which have been raised in the evidence and submissions before us. However, all that goes well beyond the fairly narrow task which the Commission is required to undertake pursuant to clause 48 of Schedule 1.

[53] The primary alternative award variation proposed by the unions to address the accepted inconsistency and interaction difficulty which arise from the casual conversion clauses in the 12 awards is to delete those clauses and to replace them with a new award entitlement which effectively reproduces the scheme of the residual right to request casual conversion in Subdivision C of Division 4A of Part 2-2 of the Act, but modified so that the requirement in s.66F(1)(a) for 12 months’ employment before such a request can be made is changed to 6 months. The CFMMEU proposal goes further and seeks also to incorporate the requirement for employer offers for casual conversion in Subdivision B into the construction awards, but with the 12 months’ employment criterion in s.66B(1)(a) changed to 6 months. These alternatives are advanced primarily on the basis that the capacity under the Manufacturing Award-type casual conversion clauses to convert after six months’ employment is such an overwhelming advantage to employees that it must be preserved in order to maintain the integrity and fairness of the award safety net.

[54] However, this alternative approach has a number of fundamental problems, all of which were articulated in the July 2021 decision.

[55] First, under the casual conversion clauses in all 12 awards, as with the Manufacturing Award, the entitlement to request conversion is only conferred on a casual employee who is not an ‘irregular casual employee’ and who has been engaged for ‘a sequence of periods of employment … during a period of 6 months’. An ‘irregular casual employee’ is one engaged to perform work on an occasional, non-systematic or irregular basis. That is, only regular or systematic service as a casual counts in respect of the 6 months’ requirement. This is not the same thing as the requirement in s.66F(1)(a), which simply measures the temporal requirement of 12 months from the day the employment started. Thus, the total period of casual employment may be well in excess of 6 months before the employee enjoys a 6-month period of regular or systematic casual employment. Under the award clauses therefore, a casual employee will only be entitled to request conversion 6 months after the commencement of their employment if their employment was regular or systematic from ‘day one’.

[56] In the July 2021 decision, the Full Bench said that ‘[e]xperience would tend to suggest that this may not be common’. The evidence adduced by the unions before us bears this out. The evidence of Mr Dyminski and Mr Bathman described a history of casual employment which for many years was merely seasonal in nature and could not have satisfied the requirement for 6 months’ regular employment. The evidence of Ms Rea and Ms Odonnell was less clear about the circumstances of their employment, but it can reasonably be inferred that they did not meet the criteria to request casual conversion in the first 6 months’ of employment and, in Ms Odonnell’s case, may still not have met the criteria after a decade of employment. The situation described by Ms Fawke is distinct because she commenced her casual employment on a full-time basis and thus was able to meet the criterion of 6 months’ regular casual employment 6 months after she first started. The evidence of Ms Te Awa concerning the UWU’s campaigns at Youfoodz and Country Chef does not appear to bear directly on the question, since the UWU appears to have been successful in achieving bespoke casual conversion systems with their own criteria, albeit that it is likely that the award clause was used as a leverage point on obtaining that result.

[57] We conclude from this that, for most casual employees covered by the 12 awards in question, the 6-month criterion for requesting conversion under the award clause is likely not to be an advantage at all when compared to the NES residual right to request conversion, because the criterion will probably not be met in the first 6 months or even 12 months of employment. Despite this matter being the subject of finding (4) in the July 2021 decision, the unions’ submissions simply did not address this issue and proceeded on the unsound assumption that the award clauses would permit conversion to be requested sooner than under the NES provisions.

[58] Second, in 9 of the 12 awards (i.e. not including the Textile Award, the Electrical Contracting Award and the Graphic Arts Award), the casual conversion clause contains a provision in the same terms as clause 11.5(j), which allows the criterion of 6-months’ regular casual employment to be extended to 12 months by majority agreement at the workplace or by individual agreement with a casual employee. If this provision is utilised, it not only renders what is said to be the comparative advantage of the award clauses over the NES provisions illusory, but creates a positive disadvantage in that 12 months’ regular casual employment becomes the requirement as against the NES requirement for 6 months’ regular employment after a minimum period of 12 months’ total employment. Again, the unions’ submissions bypassed this issue entirely, despite the fact that it was the subject of finding (4) in the July 2021 decision, and proceeded on the false assumption that the award clauses in issue are simply based on a 6 months’ employment criterion. Nor was any evidence adduced about the extent to which employers have utilised the facilitative provision.

[59] Third, the unions’ alternative proposals are advanced under the guise of preserving the status quo, but in reality they do not seek to preserve the existing provisions, or even the essential elements of the existing provisions, but rather would create something entirely new. The existing provisions provide a oneoff opportunity to request conversion after 6 months’ regular casual employment, extendable to 12 months (except in the case of the Textile Award, the Electrical Contracting Award and the Graphic Arts Award). The alternatives proposed provide for an ongoing opportunity to request conversion after 6 months’ regular employment and seek to incorporate all of the more beneficial aspects of the statutory provisions which were identified in finding (1) into an award term. The CFMMEU proposal goes even further and seeks to incorporate the NES requirement for employers to offer casual conversion into the award, but with a 6 months’ employment criterion. No provision of this nature has ever appeared in any of the 12 awards. Finding (8) in the July 2021 decision explained why this approach was not tenable. The unions’ submissions have not attempted to demonstrate why this finding was wrong but, again, have simply ignored it. The limited review which clause 48 of Schedule 1 requires to be conducted is not the proper avenue for the advancement of proposals for entirely new award entitlements. As earlier stated, parties which wish to pursue claims of this nature should make an application pursuant to s.158(1) and present a full merits case in support of such an application to the Commission.”

1. The Full Bench was not persuaded to depart from its provisional views, and with respect to the Food Award, deleted the earlier clause and inserted the following:

“Offers and requests for conversion from casual employment to full-time or part-time employment are provided for in the NES.

NOTE: Disputes about offers and requests for casual conversion under the  NES are to be dealt with under clause 33 – Dispute resolution.”

1. The Employer noted that it attempted from August 2021 to reach a consent position with the UWU to have the Agreement varied by a vote of employees. In correspondence dated 8 September 2021, the UWU advised that it could not endorse the change proposed by the Employer relevant to casual conversion.  This was so because of the Agreement’s terms to permit conversation at 9 months and not at 12 months, and the NES applies in any case.  

1. Mr Segerius gave evidence in this matter and suggested that without a variation to the Agreement, the Employer’s site would have to contend with the confusion and uncertainty of having the Agreement prescribing a definition of casual employee and casual conversion provisions that are significantly different from and potentially in conflict with the NES provisions.

1. Mr Segerius stated that in September 2021, the Employer wanted to ensure it was meeting its obligations with respect to offering eligible employees casual conversion to permanent employment.  The employees offered conversion were those casual employees, other than an irregular casual employee, who had been engaged by the Employer for a sequence of periods of employment during a period of nine months.

1. Of those offered conversion in September 2021:

·  15 casual employees immediately accepted the offer of permanent employment;

·  3 casual employees indicated that they intend to convert to full-time;

·  4 casual employees indicated that they intended to convert to permanent part-time;

·  1 casual employee stated that they intend to remain a casual employee.

1. At the time Mr Segerius made the witness statement, 58 casual employees were covered by the Agreement:

·  12 of whom had worked for less than six months;

·  21 of whom had worked for more than six months but less than 9 months;

·  6 of whom had worked for more than 9 months but less than 12 months; and

·  19 of whom had worked for more than 12 months.

1. Mr Segerius stated that if the variation is not made, it is his understanding that the Employer would need to offer casual employment to an eligible employee at nine months and then again at 12 months.  Mr Segerius noted that even at the nominal expiry date of the Agreement, in negotiations for a new agreement, the UWU and its members may not agree to simply adopt the NES provisions.

The UWU’s submissions

1. The UWU submitted that the legislative provisions and circumstances under which the award variations were made differ from those relating to this application before the Commission.  Clause 48 of Schedule 1 of the Amending Act imposed a proactive obligation on the Commission to ‘clean up’ the modern awards to ensure that all modern awards were consistent with the new casual provisions in the Act. The Commission was required to review all casual award terms and carefully identify whether any terms gave rise to an interaction difficulty or uncertainty with the Act. If an inconsistency, difficulty, or uncertainty in an award could be identified, the Commission was required, within six months of the commencement of the Amending Act, to make a determination varying the award.

1. The scope and nature of the Casual Terms Award Review 2021 reflects the fact that the modern awards set the minimum industry standards for a sizable percentage of the Australian workforce and are created and varied by Commission determinations.

1. The UWU noted that in contrast, enterprise agreements are collectively bargained at the enterprise level between employers and employees, who may (or may not be) represented by a union.

1. The UWU noted that in Mr Segerius’ witness statement, he confirmed that all casual employees employed under the Agreement are treated as casual employees under the Act. As such, the UWU submitted that any difficulties or uncertainties identified by the Employer are, in practice, non-existent. Accordingly, the UWU submitted that the interaction between the Agreement’s casual employee definition and the Act’s new definition does not create a difficulty or uncertainty that should enliven the Commissioner’s power to vary the Agreement. However, if the Commission determines that it is appropriate to vary the Agreement, the UWU considers it should be varied as follows:

“Clause 19.1(a) is deleted and replaced by the following:

19.1(a) Casual employee has the meaning given by section 15A of the Act.”

1. With respect to casual conversion, the UWU submitted that modern awards and enterprise agreements are created and approved via very different processes.  Modern awards provide a minimum safety net of terms and conditions for a vast number of employees in Australia. The Commission must make modern award determinations consistent with the modern awards objective outlined at section 134 of the Act.

1. The Agreement and its previous iterations were negotiated directly between the Employer and its employees, represented by the UWU. During bargaining between the parties, employees negotiated provisions into the Agreement relating to the conversion of casual employees. A majority of employees voted to approve an Agreement that allowed an employee to covert to permanent employment if they had been engaged by the Employer for ‘a sequence of periods of employment…during a period of nine (9) months’.

1. The UWU asserted that this feature of the Agreement’s casual conversion clause is more beneficial to employees than the NES provision. The UWU submitted that, in seeking to resolve any perceived or actual difficulty or uncertainty, the Commission cannot remove rights and entitlements that are beneficial to, and were successfully negotiated by, employees covered by the Agreement.

1. Further, the UWU asserted that it is not appropriate for the NES provisions to be effectively replicated in full within the Agreement, particularly when the provisions within the Act may be subject to legislative change.

1. The UWU asserted that, in the above circumstances, it is not necessary or appropriate for the Commission to exercise its discretion to remove the current benefits contained within the casual conversion provision from the Agreement. If, however, the Commission determines that it is appropriate the vary the Agreement, the UWU proposed the following variation:

“Clause 19.4(j) is amended as follows:

The Company and the majority of the employees in the relevant workplace or a section or sections of it, or  the casual employee concerned, may agree that the Company is only required to apply the NES casual conversion provisions , but only in respect of a currently engaged individual employee or group of employees. Any such agreement reached must be kept by the Company as a time and wages record. Any such agreement reached with an individual employee may only be reached within the two months prior to the period of nine months referred to in clause 19.4(a).

Clause 19.4(m) is inserted as follows:

If, for any reason, a Casual employee’s employment is not converted to permanent full or part time employment under the provisions of this clause, the casual conversion provisions in the NES apply.”

Consideration

1. For the Commission to exercise its discretion to vary an Agreement in the manner sought, the Commission must either:

(i)be satisfied that there is an uncertainty or difficulty relating to the interaction between the Agreement and either the definition of casual employee and/or how or when casual conversion applies; or

(ii)be satisfied the variation would make the Agreement operate effectively with either or both of the above provisions.

1. The Commission may decide against exercising discretion to make a variation.

1. In undertaking the Casual Terms Award Review 2021, the Commission was compelled to, within a period of six months, conduct a review with respect to each relevant award containing casual provisions.  If the review concluded that the casual term within an award was not consistent with the new casual definition within the Act, or there is a difficulty or uncertainty relating to the interaction between the award and the Act, the Commission was required to make a determination varying the modern award to make the award consistent or operate effectively with the Act.

1. There was a compulsion on the Commission to make a determination per each relevant award.

Casual employee definition

1. I am satisfied that there is an uncertainty or difficulty relating to the Agreement definition of a casual employee and the Act’s definition.  I consider that there is both uncertainty and difficulty, and it would not be appropriate for the Agreement’s definition at clause 19.1(a) to remain in force now that the Act provides for an alternative description of a casual employee.  I do not consider that the two contrasting definitions can be read harmoniously together.

1. I will exercise my discretion to vary the Agreement by deleting the following from clause 19.1(a) of the Agreement:

“A Casual employee shall mean any employee engaged by the hour who may be put off or leave the Company’s service at any moment without notice.”

1. I will exercise my discretion to vary the Agreement by inserting the following into clause 19.1(a) of the Agreement:

“(a)        Casual employee has the meaning given by section 15A of the Act.”

Casual conversion clause

1. Where the Casual Terms Award Review 2021 was compelled to act to make determinations on each relevant Award, there is no such compulsion for the Commission to make a determination with respect to this application. 

1. I accept that it is now administratively difficult for the Employer to understand its responsibilities under the Agreement and the Act, and it is probably difficult for employees to understand their entitlements. Under the Agreement there is a set of entitlements and responsibilities; there is another set of entitlements and responsibilities pursuant to the Act. They are not competing entitlements and responsibilities.  

1. I understand the Full Bench in the reviews of the Metals Award and Food Award was tasked to consider the situation where in each of those awards, casual employees could convert at six months, yet the new provisions in the Act provided for conversion at 12 months.  The Full Bench in each of those award reviews determined that overall, the entitlements under the Act were superior to the award entitlements, largely on account of the residual right under the Act allowing employees to make more than one request, if they so choose, over the span of their employment.

1. The Full Bench was also required to have regard to s.138 of the Act requiring achievement of the modern award objective at s.134 of the Act. There is no requirement to have regard to s.138 of the Act in determining this application.

1. In the matter before me, the employees have made a contract or a bargain with their employer in making the Agreement.  While it is true that new casual employees employed by the Employer would not have been employees who voted on the making of the Agreement, they are, nevertheless, covered by the Agreement.

1. The bargain struck as part of making the Agreement is that employees may request, at nine months of regular and systematic casual work, to convert from casual employment to full-time or part-time permanent employment.

1. The evidence before the Commission is that when the Employer informed employees in September 2021 of their right to request conversion, 15 casual employees took up the opportunity to convert to permanent employment.  This is a compelling reason why the sanctity of the bargain reached by employees covered by the Agreement and the Employer should be respected and not dissolved.

1. The Employer urges the Commission to remove the requirement to offer casual conversion at nine months, and simply provide for the NES term.  To do so would no doubt make the Employer’s administrative task less onerous and would provide for a clear set of rules for all those covered by the Agreement to understand.  It is accepted that having various rules apply at different times is cumbersome and potentially confusing.

1. Employees and their representatives are entitled to reach a bargain with an employer regarding casual conversion, and for the period the casual employee has to be engaged to be considered for conversion may be any length at all.  It is possible that an enterprise agreement could contain a casual conversion clause at three months of regular and systematic employment.  If that is the bargain struck by the parties, that is their bargain. 

1. Simply because the NES provides an entitlement at 12 months does not diminish the entitlements employees have under an Agreement allowing for conversion at three months in the above scenario.  

1. Mr Segerius’ evidence is that when bargaining commences for the next round, employees and the UWU may not agree to simply adopt the NES provisions and may seek for a more advantageous casual conversion clause.  That is a possibility in any workplace, and the NES may become the minimum requirement, with employees in workplaces striving for improved entitlements.

1. Now that the NES provisions are available to the employees covered by the Agreement, the employees have more casual conversion entitlements than ever.  They have the terms within the Agreement providing for casual conversion at nine months for systematic and regular casual employees, and then again, the NES provisions which apply at 12 months and then ongoing.

1. I do not accept that there is uncertainty with respect to the two sets of entitlements.  There are certain things that might happen at nine months, and then there are other things that might happen at 12 months and thereafter. 

1. Any difficulty that there might be relating to the interaction between the Agreement and NES terms is that there might be some confusion that rights exist at nine months, then other rights at 12 months and ongoing.  There is, of course, difficulty for the Employer in having to determine eligibility at nine months and then eligibility at 12 months and ongoing. 

1. I am not, however, satisfied that this difficulty is one that would militate against the rights of casual employees to request conversion at nine months, which on the evidence before the Commission is something that is enthusiastically adopted by some employees at this workplace.  In my experience, it is not common for casual employees to embrace conversion to permanent employment on account of the substantial reduction in wages, however employees will have their own reasons as to why they elect or decline permanent employment.

1. I consider it appropriate to make a variation to the Agreement to inform employees covered by the Agreement of their entitlements under the NES.  This is to supplement their entitlements within the Agreement.  Presently the employees are entitled to both, and I consider there to be no satisfactory reason why they should not retain their entitlements under the Agreement. 

1. I do not consider it necessary to reproduce the entire provisions of the NES as sought by the Employer.  I will adopt the clause used by the Full Bench in the review, save that I will include in the variation when one part of the clause applies at nine months, and when the remainder applies at 12 months.

1. Further, it is noted that modern awards accessible on the Commission’s webpage provide for a hyperlink to the entire NES from the standard casual conversion clause.  Employees searching for their entitlements need to scroll approximately 10 pages from within a 91 page document to come across ss.66A-66M of the Act.  Providing a reference to the terms of the NES rather than reproducing the current terms of the Act allows for flexibility in the event the NES provisions are altered by legislation.

1. I consider it appropriate in the circumstances to include a provision allowing an employee to request from the Employer a copy of the NES which may be provided to the employee electronically, and only if the employee does not have an email account, should the Employer be required to provide to the employee a hard copy of the NES.   

1. I consider it appropriate in the circumstances to make a variation to clause 19.4(j) as proposed by the UWU, allowing for agreement to be reached between an individual employee or a majority of employees and the Employer, between seven and nine months, to apply only the NES casual conversion provisions. 

1. I will exercise my discretion to vary the Agreement by deleting clause 19.4 from the Agreement and replacing it with the following:

“19.4 Casual conversion to full-time or part-time employment

Note:  This clause provides for an entitlement for casual employees to request conversion to full-time or part-time employment, if eligible.  The first entitlement is for eligible employees with a minimum of 9 months’ casual employment.  The second and supplementary entitlement is for eligible employees with a minimum of 12 months’ casual employment.

Employees with a minimum of 9 months’ casual employment:

(a)A Casual employee, other than an irregular casual employee, who has been engaged by the Company for a sequence of periods of employment under this Agreement during a period of nine (9) months, thereafter has the right to elect to have their contract of employment converted to Permanent Full- time or Permanent Part-time employment, subject to a permanent position being available, if the employment is to continue beyond the 6 month pre-condition service period.

(b)The Company must give the employee notice in writing of the provisions of clause 19.4 within four weeks of the employee having attained such period of  nine (9) months.  The employee retains their right of election under clause 19.4(a) if the Company fails to comply with clause 19.4(b).

(c)Any such casual employee who does not within four weeks of receiving written notice elect to convert their contract of employment to full-time or part-time employment is deemed to have elected against any such conversion.

(d)Any Casual employee who has a right to elect under clause 19.4(a), on receiving notice under clause 19.4(b) or after the expiry of the time for giving such notice, may give four weeks’ notice in writing to the Company that they seek to elect to convert their contract of employment to full- time or part-time employment, and within four weeks of receiving such notice the Company must consent to or refuse the election but must not unreasonably so refuse.

(e)Once a casual employee has elected to become and been converted to a full time or part- time employee, the employee may only revert to casual employment by written agreement with the Company.

(f)If a casual employee has elected to have their contract of employment converted to full-time or part-time employment in accordance with clause 19.4(d), the Company and employee must, subject to clause 19.4(d), discuss and agree on:

(i)which form of employment the employee will convert to, being full-time or part-time; and

(ii)if it is agreed that the employee will become a part-time employee, the number of hours and the pattern of hours that will be worked, will be as set out in the Part-time Employee provisions of this Agreement.

(g)An employee who has worked on a full-time basis throughout the period of casual employment has the right to elect to convert their contract of employment to full-time employment and an employee who has worked on a part-time basis during the period of casual employment has the right to elect to convert their contract of employment to part-time employment, on the basis of the same number of hours and times of work as previously worked, unless other arrangements are agreed on between the Company and employee.

(h)Following such agreement being reached, the employee converts to full-time or part- time employment.

(i)Where, in accordance with clause 19.4(d) the Company refuses an election to convert, the reasons for doing so must be fully stated to and discussed with the employee concerned and a genuine attempt made to reach agreement.

(j)The Company and the majority of the employees in the relevant workplace or a section or sections of it, or the casual employee concerned, may agree that the Company is only required to apply the NES casual conversion provisions, but only in respect of a currently engaged individual employee or group of employees. Any such agreement reached must be kept by the Company as a time and wages record. Any such agreement reached with an individual employee may only be reached within the two months prior to the period of nine months referred to in clause 19.4(a).

(k)For the purposes of clause 19.4, an irregular casual employee is one who has been engaged to perform work on an occasional or non-systematic or irregular basis.

(l)An employee must not be engaged and re-engaged to avoid any obligation under this agreement.

Employees with a minimum of 12 months’ casual employment:

(m)Offers and requests for conversion from casual employment to full-time or part-time employment are provided for in the NES.

(n)Upon request by an employee to the Company, the Company must, within seven days of such request provide an electronic link to the employee of the NES as in force at the time of providing the electronic link. Only if the employee does not have an email account is the Company required to provide a hard-copy of the NES in force to the employee.

NOTE: Disputes about offers and requests for casual conversion under the NES are to be dealt with under clause 12. DISPUTE RESOLUTION.”

1. An Order PR743087 varying the Agreement will be published with this Decision and take effect from today’s date.   

COMMISSIONER

[1] Casual terms award review 2021 [2021] FWC 1894.

[2] Casual Terms Award Review 2021 [2021] FWCFB 4144.

[3] Ibid.

[4] Casual Terms Award Review 2021 [2021] FWCFB 5530.

Printed by authority of the Commonwealth Government Printer

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