Q. “We plan to hire several employees on fixed-term contracts. The employees will work full-time for the duration of the contract. Will they accrue (and be able to take) annual leave or personal/carer’s leave during this period? Or are they considered casuals and therefore ineligible for paid leave under the National Employment Standards? The employees are not covered by a modern award or an enterprise agreement.”

 

A. An employee employed on a fixed-term contract who is working full-time or part-time will accrue an entitlement to both paid annual leave and paid personal leave.

The Fair Work Act (sections 87(2) and 96(2)) states that an employee accrues annual leave and personal leave progressively during a year of service according to the employee’s ordinary hours of work. 

In the case of annual leave, section 90(2) provides that if, when the employment of an employee ends, if the employee has a period of accrued annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave.

Furthermore, if a public holiday falls on a day that the employee would normally be working, they would also be entitled to payment for that day.

 

What about casual employees?

An employee is a casual if there is no firm advance commitment to continuing and indefinite work. A casual employee is paid only for the time actually worked  and in many industrial instruments, this is subject to a minimum payment per engagement. 

Casual employees do not receive payment for public holidays, personal leave or annual leave. An important aspect of this type of employment is that the employee’s services may be terminated without notice.

The bottom line: The nature of the contract is not relevant when determining entitlement to paid annual leave or paid personal/carer’s leave, but the employee must be employed on a full-time or part-time basis under the terms of the fixed-term contract. A casual employee is an employee who generally works fluctuating hours and is called in as required.