I’m an Employer. Are My Employees Casuals?

There is no general definition of a casual employee. This makes it tricky for employers to understand their rights and obligations, and classify staff correctly to avoid any future claims. In particular, it makes it all the more important to answer the question: “are my employees casuals?”

This article will provide you with guidance on whether your employees are casuals, and what this means for your business.

Determining Whether Your Employees are Casuals

If an award or enterprise agreement does not cover your employees, the common law characterisation of a ‘casual employee’ will apply. The ‘common law’ means the decisions that courts have made in previous cases.

The courts have been reluctant to provide a concrete definition of a casual employee. However, there are a number of factors you can consider when determining whether a casual employment relationship exists.

When asking yourself “are my employees casuals?”, it is important to determine the nature of work performed and consider the entire relationship between you and the employee.

Entitlements of Casual Employees

Permanent and casual employees have different entitlements. It is important to keep these entitlements in mind when employing casuals, to ensure you know the rights of both yourself and your casual employees.

Casual Employee Leave Entitlements

Although long-term service can be an indicator of a permanent employment relationship, some casual employees are long-term casuals who may work regularly and systematically. If this is the case, and those employees have a reasonable expectation of continuing employment, they will be entitled to:

• unpaid parental leave of 12 months, provided you have employed them on a regular and systematic basis for at least 12 months; and
• an unfair dismissal claim once they have served the minimum employment period of 6 months, unless you are a small business with fewer than 15 employees (in which case, the minimum employment period is 12 months).

Requests to Become Permanent Employees

Importantly, some casual employees under various modern awards may have a right to request permanent employment.

If they wish to make such a request, casual employees must show:

• that you have employed them for a minimum of 12 months; and
• that over the 12 months, they have worked a pattern of hours on an ongoing basis without significant change. They must be able to continue on this basis under either full-time or part provisions of the award.

As their employer:

• you must tell every casual employee that they have the right to request permanent employment. This has to happen within 12 months of their initial engagement, regardless of whether they become eligible or not to make the request; and
• you may refuse the employee’s request on reasonable grounds.

Implications for Employers

As an employer, you must take care when engaging employees on a casual basis. Failure to correctly classify an employee and pay them accordingly may result in a penalty against you under the Fair Work Act 2009 or the applicable modern award.

These penalties may cost up to $54,000 for a corporation and up to $10,800 for an individual. Furthermore, failure to correctly classify and pay an individual could result in the employee making underpayment claims against you. The Australian Taxation Office may also bring claims for failure to withhold the correct tax.

Key Takeaways

As an employer, you need to know the answer when you ask yourself: are my employees casuals? You do not have to pay casuals leave like you do with permanent employees, but you may have to pay them a casual loading of 25%. Casual employees who have regularly worked for you over a period of time may also be able to take additional leave or request to change to permanent employment.

If you need additional advice on employee entitlements, contact LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.