As an employer, you may not always need to employ staff on an ongoing, permanent basis. It may be more appropriate for you to engage them as a part-time or casual employee. These different categories of employment confer certain entitlements to your employees and consequent obligations to you, which you must be aware of. Failing to comply with these obligations can put you at risk of receiving hefty penalties from bodies such as the Fair Work Ombudsman (FWO). As such, it is important to understand the different ways in which you can engage employees. This article will run through the differences between each type of employment arrangement, identifying employer obligations and employee rights. 

Casual Employment

Casual employees hold no firm commitment in advance for work. This means that they have no guaranteed hours of work.

The termination of a casual employee can occur with one hours notice. This applies both if a casual employee terminates their employment, or you terminate their employment. However, this is not the case if your employee’s contract specifically requires a greater notice period.

Casual employees are usually notified of their hours as needed, so they generally work irregular hours. They can also choose to accept or refuse these hours.

Casual employees are not entitled to many entitlements that apply to full-time employees, such as paid leave or paid days off on public holidays. Instead, they typically receive a casual loading on top of the base hourly rate of pay.

Casual Employment Entitlements

Casual employees receive:

  • higher hourly pay rates than full-time and part-time employees;
  • two days unpaid carer’s leave and two days unpaid compassionate leave per occasion; and
  • five days of unpaid family and domestic violence leave (over 12 months).

Regular and Systematic Casual Employees

Suppose one of your casual employees has worked for you for a long period of time and has a reasonable expectation of continuing employment. In that case, they may be considered regular and systematic casual employees. A casual employee may be considered ‘regular and systematic’ if they:

  • work full-time hours over a long period of time;
  • have a clear pattern or roster for the days or hours they work; or
  • you regularly offer them work and that work is accepted sufficiently often that the employment relationship itself is regular and systematic.

If a casual employee works on a regular and systematic basis for a prolonged period of time, they may be able to claim that they are, in fact, permanent employees. Therefore, they should be provided with the minimum entitlements contained in the National Employment Standards (NES), including:

  • personal leave; and
  • annual leave.

Such claims could potentially be very costly, as they result in underpayments and may result in penalties for breaching the NES.

Part-time Employment

Part-time employees work on average less than 38 hours per week. They usually work regular hours each week, which they generally agree to under their award. If this is the case, any variations to these hours usually need to be agreed to in writing.

You can engage part-time employees on a:

  • permanent;
  • fixed-term; or 
  • maximum term basis.

The termination of part-time employment requires a notice period, making the process more complex than terminating casual employment. The duration of the notice period depends on how long the part-time employee has been working for you. It may also depend on any applicable notice period provided for in their contract of employment, whichever is greater.

Entitlements

Part-time employees share the same entitlements to paid leave as full-time employees but on a pro-rata basis. A pro-rata basis means that it is based on how many hours they work weekly. 

These entitlements include:

  • paid leave, such as annual leave;
  • sick and carers leave; and 
  • long-service leave.

Your part-time employees are also entitled to leave and redundancy payouts. The latter depends on the conditions of the termination.

Full-Time Employment

Full-time employees generally work a maximum of 38 hours per week, plus reasonable additional hours. They can be permanent employees or on fixed-term contracts.

Like part-time employment, the termination of full-time employment requires a notice period, making the process more complex than terminating casual employment. The duration of the notice period depends on how long the full-time employee has been working for you.

Entitlements

Full-time employees are entitled to:

  • four weeks of annual leave for each year of service;
  • ten days of personal or carers leave for each year of service;
  • accumulated leave (annual and long-service); and
  • redundancy payouts (depending on the conditions of the employee’s termination).

Key Takeaways

Misunderstanding your obligations to your employees can put you at risk of receiving hefty penalties from bodies such as the FWO. It can also result in general employee dissatisfaction, which may affect:

  • overall staff morale;
  • performance; and 
  • turnover rates.

As such, it is extremely important to understand what categories of employment are suitable for your business and also what categories of employment your current employees fall under. If you have any questions about employee entitlements, contact LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.

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