Casual workers now have the right to become permanent

With casual workers making up over 25% of the number of employees in Australia*, the Fair Work Commission's recent ruling could allow many staff to become permanent employees in a full-time or part-time capacity if they meet the criteria.

Casual employment can be difficult for employees with no guarantee of hours and the lack of leave entitlements. 

To create greater job security, union leaders lobbied the Fair Work Commission to give employees an opportunity for mandatory conversion of casual staff into permanent position after just six months of regular work.

The Fair Work Commission recently handed down the ruling, which instead agreed to give casual employees the right to permanent employment after 12 months. 

The ruling

The landmark ruling by the Commission affects employees under 85 modern awards including retail, aged-care and hospitality industries, which are some of the largest employers of casual workers.

Casual workers may be able convert to full or part-time permanent employment after working for 12 months if they ‘worked a pattern of hours on an ongoing basis without significant adjustment’ and the role could continue to be performed under full or part-time status. 

The ruling allows employers to refuse a conversion on reasonable grounds, such as if it means a significant adjustment to the casual employee’s hours or work, or if they foresee the position wouldn’t exist within the next 12 months.

How this can affect super entitlements

There’s no change to the super entitlement for casual workers as all employers in Australia are required to pay super for employees. Casual workers must be paid super guarantee if they meet the age, minimum wage and hours set out below. 

The superannuation guarantee means that employers must pay 9.5% of the ‘ordinary time earnings’ into an employee’s super fund if:

  • they’re over 18 and earn more than $450 before tax in a calendar month, or
  • they’re under 18 and work more than 30 hours a week (and still earn more than $450 in the calendar month).

Exactly what are ordinary time earnings? These are the employee's wage, plus any casual or shift loadings, and may also include commissions and some allowance1. Overtime payments are not included in ordinary time earnings so super shouldn’t be paid based on these. 

It’s a good idea to check the award, enterprise agreement and other registered agreements as some contain extra terms for super that apply on top of the superannuation guarantee.

Go to the experts 

Your employees can learn more about super by watching our Super basics education module, which features ways to contribute and tips to maximise their super balance. If your employees would like more information on their personal super situations they can speak to their financial adviser. If they don’t have an adviser, use our online tool or call 131 267 and we can find a financial adviser nearby.

 

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