Engaging casual employees rather than permanent workers may be most appropriate for your business situation. However, you still owe your casual employees certain entitlements and fair treatment. In this article, we touch on three key considerations to keep in mind when engaging casual employees on a regular basis.
1. Entitlements Owed to Casual Employees
A casual employee is entitled to:
- two days of unpaid carer and compassionate leave;
- unpaid community service leave; and
- a casual loading on top of the minimum base hourly rate.
If a modern award covers your employee, you may owe them additional entitlements to those listed above. The award will also precisely define the pay rate. For example, a casual employee covered by the Hair and Beauty Industry Award who works outside standard hours would receive:
- the ordinary hourly rate plus 50%; or
- an additional 100% on top of the ordinary hourly rate on Sundays.
A casual employee does not:
- have a guaranteed number of hours;
- have guaranteed regular hours;
- get paid carer’s, sick or annual leave; or
- need to give notice to end the employment relationship (although their award or contract may require them to give notice).
2. Long-Term Casuals
Some casual employees will work with their employer:
- regularly;
- over a long period; and
- with an expectation of ongoing work.
These employees are “long-term casuals”. They still receive the same entitlements. But they can also request flexible working arrangements and take parental leave if:
- they have worked with the same employer for a year; and
- it seems likely they will continue.
What Does ‘Regular’ Work Mean?
Working regularly for an employer does not necessarily mean weekly or fortnightly shifts. In some contexts, ‘regular’ work will be seasonal, like fruit picking. In other contexts, there may be breaks between work periods, such as during the school holidays.
When determining whether a casual employee has worked on a regular and systematic basis, the Fair Work Commission (FWC) considers:
- whether the employee regularly accepted work;
- how many hours the employee worked; and
- whether both parties expect that the work will be ongoing.
Additionally, the FWC will look at the entire relationship rather than just what the parties agreed upon at the start of employment. Sometimes, parties might enter the relationship thinking it would be a standard casual employment relationship. However, over time this can change.
Casual Conversion
Therefore, the National Employment Standards require employers to offer a casual employee the option to convert to permanent staff. To be eligible for casual conversion, the employee must:
- have worked for at least 12 months with you;
- have worked a regular pattern of hours on an ongoing basis for the last six months; and
- continue to work these hours as a full-time or part-time employee.
3. Performance Management for Casuals
Performance management may be appropriate for casual employees you engage regularly and systematically. Performance management aims to improve the employee’s performance in all aspects of their employment. It involves:
- collaborative meetings;
- appraisals; and
- goal-setting.
If you undertake performance management, you should document all discussions. For example, if a former employee brings an unfair dismissal application against you, the FWC will look at your actions to manage that employee’s performance.
If you are considering terminating the employment of a long-term casual worker, you should seek legal advice before starting performance management or the termination process.
As an employer, understand your essential employment obligations with this free LegalVision factsheet.
Key Takeaways
When engaging casual employees, different regulatory bodies may review your employment practices. For example, the Fair Work Ombudsman may investigate businesses that do not pay their employees their lawful entitlements. The Fair Work Commission may also investigate where an employee was a genuine casual.
If you want further information on how to engage casual employees regularly, our experienced employment lawyers can assist as part of our LegalVision membership. You will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. So call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
Casual employees do not have guaranteed hours, do not receive paid leave and do not usually need to give notice for ending their employment. However, you must pay casuals more through casual loading to compensate for the lack of entitlements.
Some casual employee entitlements include two days each of unpaid carer and compassionate leave, unpaid community service leave, an opportunity after 12 months of regular work to be converted to permanent employment, and a higher hourly rate than their equivalent full-time or part-time colleagues.
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