OSM said it couldn’t promise ongoing work - but the roster told a different story
An offshore employer couldn't refuse to make a casual worker permanent just by pointing to its unpredictable industry, the Fair Work Commission has found.
The decision, published on August 28, 2026, involved OSM Australia (trading as OSM Thome), a labour hire firm that crews offshore oil and gas vessels. The Construction, Forestry and Maritime Employees Union (CFMEU) took the dispute to the Commission on behalf of one of its members, a casual steward who had worked for OSM since early 2020.
The steward asked to switch from casual to permanent on October 22, 2024, relying on a clause in his enterprise agreement. It let a casual who had worked three consecutive swing cycles in the past year apply for a permanent role, and it told the employer to grant the request unless doing so would cause redundancies within the next 12 months.
OSM turned him down. In a letter dated October 31, 2024, it said it couldn't commit to ongoing employment because its client contracts weren't guaranteed and depended on the work those clients handed out.
The Commission wasn't convinced. It found OSM's explanation leaned on the general nature of the industry rather than anything specific about its contracts, and that the company's evidence on the point was thin. OSM had opposed producing detail about those contracts, which it was entitled to do, but that left little to support the refusal.
OSM's own operational evidence pointed the other way. Stewards were still being allocated to client vessels in the months after October 2024, and rosters showed steward roles running through to January 2026. There were no open vacancies at the time, but that wasn't the same as no work.
The redundancy clause mattered too. Under the agreement, casuals had to go before any permanent employee could be made redundant. When the steward made his request, no other stewards were permanent, so converting him wouldn't have put anyone out of a job as long as a single steward role remained.
OSM also argued that forcing conversion clashed with the Fair Work Act, which gives employers some discretion to refuse casual conversion. The Commission disagreed. Being “inconsistent” with the Act, it said, doesn't simply mean being “different” from it. Enterprise agreements often give workers better conditions than the law's minimum, and an employer can trade away its default position when it strikes a deal.
The Commission concluded the steward met the criteria, that making him permanent wouldn't have caused redundancies, and that OSM should have converted him from the next pay cycle after his October 2024 request.
For HR teams, the practical lesson is clear. A casual conversion request can't be knocked back on a general sense that the market might turn. If you're leaning on a redundancy exception to say no, you need current, specific evidence - live contracts, scopes of work, real head counts - and you need to record your reasoning when you make the call, not build it out later. Where an enterprise agreement offers more than the Act, expect to be held to the agreement.
