What is Casual Employment?
The distinction between full time, part time and casual employees is not always as straight forward as it might appear.
Generally speaking, casual employees work irregular hours with no guarantee of ongoing work, are hired on an informal basis and are not entitled to paid leave, termination notice or redundancy benefits. However casual workers enjoy a higher hourly pay rate to compensate for their uncertain working arrangement, have the freedom to accept or decline work as it comes and can end their employment without notice. For employers, there are distinct advantages for hiring casual workers including the flexibility to increase staff during busy periods and the right to terminate without notice.
Protection from Unfair Dismissal
There is a common misunderstanding that casual workers cannot file for unfair dismissal; however this is not always the case.
Employers are advised to monitor the employment relationship closely and be aware of whether these workers are being treated like permanent employees. Simply labelling and paying a worker under a ‘casual’ status will not entirely prelude them from obtaining unfair dismissal protection.
The FWA recognizes that casual employees who have served the minimum 6 month period of employment (or 12 months for small businesses) will be protected from unfair dismissal if:
§ The employment was on a regular and systematic basis and
§ The employee had a reasonable expectation of continuing employment.
These workers are referred to in the FWA as ‘long-term casuals’, and are afforded certain entitlements that regular casuals are not.
What is ‘Regular and Systematic'?
Unfortunately, the FWA does not provide a definition of ‘regular and systematic’. The question then becomes how do we determine when an employee has become ‘regular and systematic’? How soon can employers expect this to happen? Employers will be surprised to learn that it can happen a lot sooner than expected, just as long as a regular system or pattern of work is established.
In Ponce v DJT Staff Management Services 2010, the FWC established indicators to determine what constitutes ‘regular and systematic’, including:
§ Is there a clear pattern, system or roster for the days/hours worked? ( although varying start/finish times do not necessarily mean that the employment is not regular and systematic)
§ Does the worker hold an expectation that the employment relationship is likely to continue?
§ Does the employee expect some work to be offered each week?
§ Is there a degree of certainty about what hours/days they will be working week to week?
§ How regularly is the work being offered? If the employer regularly offers work when available and the employee makes themselves available to accept that work then it is likely to be regular and systematic
§ What is the number of hours a week the casual has worked? Is this close to the hours of full/part time employees?
§ If the number of hours is small, with gaps between days and times worked long and irregular than it is unlikely the employment is regular and systematic.
Decisions since Ponce have sought to clarify the distinction between the necessary period of service and period of employment. In Tilbrook v Willall Industries (2011) it was held that
· Continuous service by a casual employee who has an established sequence of engagements with an employer is broken only when one party makes it clear to the other party, by words or actions, that there will be no further engagements.
· Where there are gaps between individual engagements that may be due to periods of leave or absence from illness or injury, this does not interrupt the employee’s period of continuous service.
Lessons for employers
Evidently, when determining whether a casual employee is ‘regular and systematic’, the bar has been set quite low. Therefore, employers should consider the following:
· Be mindful that you are engaging your employees under the right status. Despite a written contract labelling them as a ‘casual’, they may be found to be a permanent employee.
· Before deciding to terminate a casual employee, have a look through past rosters or other work scheduling systems. Is there a ‘regular and systematic’ pattern of employment? Remember this can happen a lot sooner than one might think.
· Consider moving regular and systematic casuals to permanent full/part time employment. This will mean you can avoid paying the loading on their wages but they will be entitled to receive all other benefits under the NES, including annual and sick leave.
· Consider whether a particular modern award applies to your employees. Some modern awards include a right for a casual employee to request that they be converted to a permanent position after 12 months. However, an employer reserves the right to refuse this request on reasonable grounds.
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