With the complexity of employment law, and the difficulties of managing staff, employers are increasingly selecting to employ people as Casual employees, to try to avoid many of the pitfalls and costs associated with permanent employees.
Unfortunately, simply calling an employee a Casual, does not necessarily make them one. To ensure your employees are genuine casuals, it’s important to consider the whole employment relationship, not just the contract or job title.
If you employees are covered by a modern award or enterprise agreement which defines “casual employee” make sure the definition fits and review the rules around an employee’s entitlement to be made a permanent employee after working a period of casual employment. In some modern awards, there is a requirement to notify casual employees of their right to elect to convert to permanent employment within four weeks of the employee reaching six months of continuous service.
Otherwise, generally speaking, casual employees;
- are employed on an irregular basis, with no set roster or routine.
- have no guarantee of ongoing employment and are retained on an “as needs” basis.
- are recognised as a casual from the beginning of their employment;
- usually work for short periods of time on an irregular basis with the actual hours varying from week to week;
- are employed and paid by the hour and do not have access to annual leave or sick leave;
- do not have a consistent starting or finishing times or regular hours of work;
- are generally contacted regularly and asked to work, rather than just knowing when they are required;
- have no expectation of ongoing work;
- are free to refuse offers of work at any time due to other commitments.
Often, over time, the employment relationship changes, so too can the status of a casual employee. Traditionally, casual employees were only engaged on an irregular and non-systematic basis. However, under current laws, casual employees will still be ‘casual’ even where their hours of work are regular and certain – in such cases, they may also accrue some of the rights and entitlements of permanent employees, including:
- long service leave;
- the right to request flexible work arrangements and to take unpaid parental leave;
- protection under unfair dismissal laws.
To clarify whether a person still fits the definition of casual employee (and are not entitled accrue some of the rights and entitlements of permanent employees), consider the following factors which are used to determine whether an employment relationship described as “casual” is in fact a permanent employment relationship.
- Whether wages are paid hourly or on a salary. Wages paid hourly are most consistent with casual employment.
- The period of engagement. The longer the employee has been employed, the less likely they are to be casual
- The amount of work performed each week. An employee who regularly works full-time hours is less likely to be casual.
- The consistency of the hours. The more consistent the work, including starting and finishing times, the less likely the employment is casual.
- Whether the employee works under a roster system and how far in advance the roster is published. A roster is consistent with casual employment, however the further in advance that roster is published, the less likely the employee is casual.
- Whether the employee and employer reasonably expect ongoing work availability. If they do, the employee is less likely to be casual.
- If and how much notice an employee needs to give before taking leave. Notice and advanced notice is inconsistent with casual employment.
- Whether the employee was notified that the employment was of a casual nature (irregular, unlikely to be ongoing). If they weren’t informed, they are less likely to be a casual employee
If your employee is deemed to be a permanent employee, despite being engaged as a casual, you will be liable to back pay all of the obligations owed to a permanent employee, including paid annual and personal leave as well as notice and redundancy requirements when employment is terminated. The fact that they have been paid casual loading does not alleviate your responsibility to pay accrued annual leave, personal leave or long service leave.
If you require assistance in sorting out your Casuals from Permanents, contact HR Gurus, one of our highly experienced consultants can help.
Written by Resident HR Guru Louise Betts