The decision to employ your non-permanent staff on a part-time or casual basis depends on a number of factors. This article will explore the difference between the two employment types and whether you can hire your non-permanent staff on a part-time or casual basis.
A part-time employee usually works regular hours but less than 38 hours per week. The employees are entitled to the same benefits as a full-time employee, such as sick leave, but it is accrued on a pro-rata basis as it depends on how many hours they work per week. These employees are usually paid on an ordinary hourly rate.
A casual employee usually works irregular hours with no guaranteed hours of work per week. They are not entitled to the same benefits as part-time or full-time employees such as sick or annual leave. To compensate for this, casual employees are paid a higher hourly rate of pay than part-time or full-time employees called casual loading.
Difference between Employment Types
The main difference between the two employment types is their flexibility and rate of pay. This means that employers will need to weigh up whether the benefit of flexible and non-guaranteed working hours, as well as the right to terminate employees with little or no notice, is worth the higher hourly rate of pay for casual employees.
The alternative of hiring part-time employees means you will have lower costs in the short term, but you will be responsible for their leave entitlements in the long term. You may have the option of scheduling this leave during holiday periods, depending on the type of business you operate or when business is slow.
It is also worth noting that another difference in the rate of pay is that many Awards state that casuals are entitled to a higher rate of pay on public holidays.
There are some other factors you should consider when making this decision:
- Time or season of the year (for example, you may want to hire casuals over the Christmas period)
- Profitability of the business (for example, you may want to keep costs low while still starting up)
- Industry or nature of the work (for example, you may want to hire casual employees if you work in the hospitality or retail industry)
- Hours required (for example, you may want to hire shift workers who can accumulate up to five weeks of annual leave. This means they cannot be casual employees as they are not entitled to annual leave)
- Training required (for example, you may want to hire part-time staff if you are investing a significant amount of money in their training)
Regardless of whether your new employee is hired on a part-time or casual basis, it is best practice to provide your new staff with an Employment Agreement to ensure they are aware of their:
- Employment status;
- Hours of work;
- Leave entitlements; and
- Notice of termination of employment.
Change from Part-Time to Casual (or vice versa)
An employee can change from part-time to casual (or vice versa) at any time if the employer and employee both agree to it. However, it is important to check the relevant Award or Employment Agreement for the correct process to follow.
The relevant Award will also state whether there are specific provisions which give the employee the right to elect to become a permanent part-time employee after a certain period. Many Awards state that an employee can elect to become permanent part-time employee after a six or twelve month period.
Do you have non-permanent staff and are unsure about their employment type or your obligations? Get in touch with our employment lawyers by sending us a message or calling 1300 544 755.