When is casual really casual?
Lots of businesses rely upon casual employees, mainly due to the flexibility they afford the business, but be careful! When employing casual workers the employer needs to ensure that they are aware of all the obligations under the Fair Work Act to avoid landing themselves in a difficult and costly situation.
What is casual?
Think corner deli owner who needs a few hours in a busy period every now and then. There are no set days or specific hours there is no guarantee of ongoing work and the contract ends each time they finish. If you’re looking to employ someone under a casual arrangement then this is what you must keep in mind
A casual employee: has no guaranteed hours of work. Usually works irregular hours, doesn’t get paid sick or annual leave. Can end employment without notice, unless notice is required by a registered agreement, award or employment contract. It is the informality, uncertainty and irregularity of the engagement that gives it the characteristic of being casual.
What entitlements do casuals get?
Under the Fair Work Act, casual employees are provided with a range of entitlements including:
- Unpaid compassionate leave 2 days per occasion and
- Unpaid careers leave 2 days per occasion.
- Unpaid parental leave of 12 months, provided the casual employees have been employed on a regular and systematic basis for at least 12 months.
Casual employees can claim unfair dismissal once they have served the minimum employment period of 6 months, unless engaged by a small business with fewer than 15 employees in which case the minimum employment period is 12 months.
Avoid the relationship being “regular or systematic”
You might hear the words not regular or systematic when you’re looking at employing casuals. This is not defined by the Fair Work Act, but courts have tended to give this term a broad meaning.
- It is the employment itself that must be regular and systematic, as opposed to the actual hours or days.
- Variable start and/or finish times and variable hours from one week or month to the next will not prevent an employment relationship from being viewed as regular and systematic
- Working full-time hours over a lengthy period will strongly indicate regular and systematic employment
- A clear pattern or a roster for the hours/days worked would also be strong evidence of regular and systematic employment
- Even if there is no pattern/roster, evidence of regular and systematic employment can be established where the employer regularly offers work and that work is accepted sufficiently often to deem it regular
Employers can minimise the risk by taking the following steps:
- Before the employment commences, provide the employee with and keep a signed copy of a letter and contract confirming that they are casual, they are paid a casual loading and that the casual loading compensates for non-payment of entitlements for full time employees. If the communication is not in writing it is quite possible that a court will consider that the agreed arrangement does not exist.
- Ensure payslips show that the employee is casual, i.e. call out that casual loading separately
- No casual employee should be paid for annual leave, public holidays or sick/carer’s leave as this may infer that the employee is not casual.
Employers must take extra care when engaging employees on a casual basis, ensuring the employment relationship does not transform into a permanent role. When considering hiring employees or thinking about employment status it’s important to think about:
- If the employee will be working regular hours or to a regular roster for a defined period.
- If the employee has some level of certainty about what hours or days they will be working week to week.
- If the employee is required to notify the company if they are absent for a period.
If the is answer yes, you may need to consider their employment status and your employment obligations.
Full-time, part-time and casual what’s the difference?
- Employed to work an average 38 hours per week
- Entitled to paid leave and public holidays.
- works less than 38 hours per week
- eligible, pro-rata, to the same pay rate and conditions as a full-time worker
- Paid by the hour, with a loading of 25%
- Typically must be rostered on for a minimum 4 hours for each shift
- Eligible for overtime
- Eligible for penalty rates and shift allowances
- NOT eligible for paid leave including annual leave or carer’s leave
Cornerstone Consulting can help determine your obligations when it comes to employing people. We can advise on the correct entitlements for any employees, provide compliant employment contracts and assist if you find yourself in any type of employment dispute.
We offer a free consultation for all new clients. Give us a call to find out more.