The Fair Work Commission’s decision last week to give casual workers greater access to permanent work raised hopes that the seemingly irreversible tide of insecure employment might start to be checked.

The ACTU and some unions praised the decision as a small but positive step. Others like the AMWU called it a “kick in the guts” because it didn’t go far enough. The reception accorded it by employer groups was predictable enough. The Australian Retailers Association said it would increase costs and reduce employment flexibility.

But what does the FWC’s decision really mean? And how likely is it to prove an effective brake on the casualisation of the workforce?

An ‘in principle decision’

To put the decision in context, it is best described at this stage as an ‘in principle decision’. It is the Commission’s intention to grant many casual workers the right to apply for permanent employment, either full time or part time, after 12 months of continuous employment.

Although the decision was characterised in the media as one which allowed workers to demand conversion to permanent employment, the decision only allows for a request to be made.

The decision will result in a clause being inserted into 85 existing modern awards which will seek to give employees access to permanency.

At this stage, the Commission has produced a draft model clause to be inserted and invited interested parties (namely unions and business groups) to make further submissions before deciding on the final nature of the clauses to be inserted.

Reasons for the Commission’s decision

The FWC rightly distinguishes between people who only accept casual employment because it is the only type of employment available; and those who seek casual work because it suits their personal circumstances.

This is an important reminder to those employers who always cast casual employment as a win-win outcome for bosses and workers. The Commission’s distinction makes it clear that it’s not win-win if the employee takes a casual job because it’s all there is on offer.

The Commission also explains that permanency is important to many people because it provides a continuity of employment and therefore a level of security. It offers the support of many safeguards under the National Employment Standards and modern awards which are generally only available to permanent employees, such as annual leave and sick leave, among other benefits. Also, it typically offers workers a more secure career path and greater access to on the job training.

Wriggle room for employers

While the decision is a step in the right direction, the ultimate terms of these casual conversion clauses will be important.

First, the right to permanent conversion will only be available where the employee has worked a pattern of hours on an ongoing basis for at least 12 months.

In addition to this, the draft model clause does seem to give employers a fair bit of wriggle room to refuse a request for casual conversion.

For example, a request for a position to be made permanent could be refused if:

• It would require a “significant adjustment” to the employee’s hours of work to accommodate them in permanent employment;
• It is known or “reasonably foreseeable” that the employee’s position will cease to exist, or the employee’s hours of work will significantly change or be reduced, within the next 12 months;
• There are “other reasonable grounds” based on facts which are known or “reasonably foreseeable”.

So for a final assessment of these changes, we will have to wait on the final wording of the clauses to be inserted into the relevant awards.

It is hoped that some of the apparent loopholes in the draft model clause will be minimised after the Commission hears further submissions from unions and others over the next few months.