It is not uncommon, here at LegalVision, to be asked about the legality of terminating an employee’s employment contract. Some of the more common enquiries include: “We want to terminate A’s employment contract, A is currently working on a part-time permanent basis, do we have to pay A anything?” OR “A is employed on a casual basis but works every week on the same days. Now A is claiming he/she is part-time and that we have to pay leave entitlements, is this correct?”
How does the law define a casual employee and why is it of any importance that we know the difference?
What defines a ‘casual’ is the indeterminate nature of their employment. For this reason, casuals are entitled to a ‘casual loading’ and don’t get the same leave entitlements as those employees who work on a part-time or full-time bases. When an employee’s hours are subject to change on a weekly, or even daily basis, this usually indicates the casual nature of their employment.
On the flipside, if the employee is being asked to work consistently week on week, i.e. on the same days and during the same hours, they’re normally not casual. The line between casual and part-time is hazy at the best of times, which emphasizes the importance of having a clear employment contract, preferably drafted by an employment solicitor, to avoid any confusion between both the employer and employee. Because of this uncertainty, the trend in employment law has tended to benefit ‘casuals’ by giving them many of the employee entitlements of permanent or part-time employees.
What should you understand when you hire someone on a casual basis?
First, all employers should be aware that employing someone on a casual basis does not prevent someone from claiming they have been unfairly dismissed. This is in spite of ‘minimum notice of termination’ and ‘redundancy pay requirements’ having no application to casual-basis employees. As the law stands, casuals are within their rights to assert they have been unfairly dismissed, provided they were employed on a regular basis and that they reasonably expected that, (based on the regularity of their employment), they would continue working there.
As such, similar to permanent employees, fairness principles will apply to casuals, which means employers ought to take the same precaution when firing a casual as they would if they were dealing with a permanent employee. Also, claims by a casual of discrimination on the part of the employer are equally valid, despite the temporary nature of casual employment.
Second, while casuals don’t enjoy the same, numerous leave entitlements as permanent employees, they still benefit from some minimum leave rights. They don’t receive any paid annual leave, nor do they receive paid personal or compassionate leave. They are, however, able to seek leave for the following:
- Paid long service purposes;
- Personal or Carer’s purposes;
- Unpaid compassionate purposes;
- Unpaid jury service;
- Unpaid parental (provided they have a minimum of one year employment on a regular basis, and have a reasonable belief that their employment will continue); And
- Unpaid emergency service
Finally, employers are required to adhere to laws pertaining to industrial award rates, so that casuals are not underpaid.
Is it cheaper to employ someone on a casual basis?
If an ex-employee has a claim against you for certain unpaid entitlements, is it advisable to have an employment solicitor review the employment contract to ensure a setting off clause is drafted into the agreement. This clause allows an employer to offset the casual loading when accounting for any entitlement that has not been paid.
While some business owners believe it is more economic to hire staff on a casual basis, given they don’t owe the same entitlements, this is sometimes not the case. For example, the same risk applies to the owner with respect to notice requirements from employee to employer, which can have a detrimental impact on a new business, especially if the employee is of significant value to the company. It is more important to consider on what basis the particular staff member will most benefit the company in the long-term.
If you’re working as a casual and need guidance on your rights, don’t hesitate to call LegalVision on 1300 544 755 to speak with one of our qualified employment solicitors. We will happily provide you a fixed-fee quote to review your employment contract and make sure you’re getting the employment protection your’re entitled to.