Australia: One-sided flexibility in the workplace: Australian and UK responses

The recent Fair Work Commission (FWC) Full Bench decision to insert casual conversion clauses in modern awards,1 and the Report of the Taylor Review of Modern Working Practices in the UK,2 are responses to the same world-wide phenomena.

Increasingly, businesses are wanting to engage workers flexibly: over the last 20 years, this has led to the growth of casual, part-time and fixed-term employment – and independent contractor arrangements – in Australia.

The most recent manifestation of this flexibility has been the rapid rise across the globe of the 'gig economy': technology-based platforms which match consumers to workers who provide services.

However, the Theresa May Government-initiated Taylor Review has noted concerns that some employers use flexibility to transfer risk to – and exert control over – workers: what the Report describes as 'one-sided flexibility'.3

In this article, we examine the parallels between the Australian and UK debates over workplace flexibility – and the most recent regulatory responses to the issue.

AUSTRALIA: THE FWC CASUAL CONVERSION DECISION

One of the main devices unions in Australia have used to limit casual work has been the insertion of casual conversion clauses in awards and enterprise agreements. Under these clauses, casual employees obtain the right to request a permanent position after a certain period (6-12 months).

Casual conversion clauses became an award standard following test cases run by the union movement from the late 1990s. Under Work Choices, these clauses could no longer be included in federal awards. While they may be included in awards under the Fair Work Act 2009 (Cth), casual conversion clauses were initially only included in those modern awards where they had become an industry standard.4

In the modern awards review process, the Australian Council of Trade Unions (ACTU) sought to have a model casual conversion clause inserted in the 88 awards which didn't have one, and also sought the variation of casual conversion clauses in 17 awards which did.

In its decision of 5 July 2017, the FWC Full Bench determined that modern awards should contain a provision enabling casual employees to elect to convert to full-time or part-time status, but with significant restrictions on this right.

Under the model casual conversion clause proposed by the FWC, a casual employee can request conversion once the employee:

  • has been employed for at least 12 calendar months; and
  • over that period, has worked a pattern of hours on an ongoing basis which could continue to be performed on a part-time or full-time basis (without significant adjustment)

However, an employer may refuse a casual employee's request to convert to full-time or part-time on the grounds that:

  • a significant adjustment to the casual employee's hours would be required to accommodate the request; or
  • it is known or reasonably foreseeable that the casual employee's position will cease to exist; or
  • the employee's working hours will significantly change or be reduced within the next 12 months; or
  • on other reasonable grounds.

The employer must also provide all casual employees with information about casual conversion within 12 months of their engagement commencing.

The FWC has invited submissions from interested parties on the proposed model casual conversion clause by 2 August 2017.

Given that conversion rights in existing awards are not frequently utilised (for example, in manufacturing), there must be some question as to how effective this new casual conversion clause will be in practice.

Evidence presented to the recent Victorian Labour Hire Inquiry indicated that casual conversion clauses have proved to be of limited effect in the labour hire context (where workers are overwhelmingly engaged as casuals). The Inquiry heard that many labour hire workers do not request conversion even where they have the right to do so, possibly because they prefer to retain their casual loading.5

In reaching its decision in the casual conversion case, the FWC accepted the ACTU's argument that the unrestricted use of casual employment can operate to undermine the effectiveness of the safety net provided by modern awards and the National Employment Standards. Evidence presented to the FWC indicated that some employers engage, as long-term casuals, persons who want permanent employment. The Full Bench therefore concluded that it is fair and reasonable for those employees to have access to a mechanism for converting the casual employment to an appropriate form of permanent employment.

UK: THE TAYLOR REVIEW REPORT

A similar kind of concern about the ongoing nature of many forms of irregular work can also be seen in the Taylor Review Report.

The Review was initiated by the UK Government last year, largely in response to the increasing use of 'zero hours contracts' (roughly equivalent to casual employment in Australia) and the growth of the 'gig economy'.

Taylor's recommendations – which have been criticised as weak by key unions, but praised as achieving the right balance by the Institute of Company Directors – include the following:

  • Making it easier for non-permanent workers to be classified in the intermediate category of 'worker' under UK employment legislation, and therefore obtain some statutory employment rights (e.g. the minimum wage, holiday pay and sick leave). The worker category would be re-named 'dependent contractor', with greater emphasis accorded to the level of control exercised by the organisation for which services are performed – and less on whether the worker is able to substitute another to perform services in determining dependent contractor status.
  • Enabling workers in the gig economy to obtain payment on a kind of 'piece rates' basis, through which they are compensated for tasks performed – as long as they clear the national minimum wage level with a 20% margin of error.
  • Providing agency workers (i.e. labour hire staff) with the right to request a direct employment contract with the hirer once they have been engaged with the same hirer for at least 12 months. The hirer would be required to give reasonable consideration to the request.
  • Providing a similar right to workers on zero hours contracts (i.e. the right to request, after 12 months, a contract guaranteeing hours which better reflect those actually worked).

The last two of Taylor's proposals are, of course, very similar to the notion of casual conversion endorsed by the FWC here in Australia. These proposals are also likely to be subject to the same limitations as casual conversion clauses, especially the right of the employer to reject requests for more permanent forms of engagement. In any case, the UK Government's response to the Taylor recommendations was lukewarm, and it would have to negotiate any change proposals with its Coalition partner (the DUP).

Professor Anthony Forsyth was Chair of the Victorian Government Inquiry into Labour Hire and Insecure Work in 2015-16.

Footnotes

1 4-yearly review of modern awards – Casual employment and part-time employment [2017] FWCFB 3541 (5 July 2017). The decision also dealt with various other aspects of casual and part-time work, including union claims for increased minimum engagement periods for these workers and provisions 'deeming' casual employees to be full-time or part-time. As to how these and various employer claims were decided upon by the FWC, see further the FWC's Decision Summary at:
https://www.fwc.gov.au/documents/decision_summaries/2017fwcfb3541-summary.pdf

2 Good Work: The Taylor Review of Modern Working Practices, July 2017. https://www.gov.uk/government/publications/good-work-the-taylor-review-of-modern-working-practices

3 Ibid, Part 6.

4 Award Modernisation (2008) 177 IR 364.

5 Victorian Inquiry into Labour Hire and Insecure Work: Final Report, 31 August 2016, pages 95-96.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Chambers Asia Pacific Awards 2016 Winner – Australia
Client Service Award
Employer of Choice for Gender Equality (WGEA)

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions