As an employer, it’s important to have a clear definition of what constitutes a “casual worker” and “casual service.” It is only when these terms are clear to you can you proceed with appropriately engaging casual employees’ services and also aptly provide them remuneration and other benefits, as mandated by legislation.
The Fair Work Act does not specifically define the term “casual employee,” nor has it been given a definition by an applicable modern award or enterprise agreement, besides being termed as an employee engaged in casual work and being paid as such.
Still, from this, we derive that a casual employee is generally paid only for the time actually rendered in the performance of a certain task or work.
Usually, too, this rendered work is subject to a minimum payment per engagement in most industrial instruments. Except under very few and specific circumstances, the casual employee does not receive payments for public holidays, carer’s/personal leave, or annual leave.
One of the most important and glaring accepted definitions of this type of employment is that the casual employee can be terminated without notice.
What defines a period of service as casual?
- It is considered a separate contract of employment each time a casual employee is engaged, per occasion. Contracts may vary in length and setup: week to week, shift to shift, hour to hour, or for any agreed upon short period of time. This logic dictates that no casual worker is engaged in a continuous period of employment, beyond any single engagement.
- The period of service holds more relevance than the period of employment, for purposes under the issue of unfair dismissal. Once the conditions promulgated by the Fair Work Act (s384(2)(a)) are satisfied, the period of service by a casual employee will then count towards the period of continuous service.
- Upon establishment of continuous service, the employer or employee can only break continuous service by making it clear to the other party that no further engagements will happen.
- Casual employees should remember that some periods of service will meet certain conditions of the Fair Work Act and others will not.
- Absence due to injury or illness isn’t considered a break from the period of continuous service.
Understanding the above requirements and specifications will help you as employer and business owner/manager in the conduct of your business, especially, of course, when you engage the services of casual workers.
So what differentiates casual employment from part- or full-time employment?
- How wages are paid — with casual employment, hourly rates are much more consistent than weekly or monthly wages
- Period of employment — simply, the longer the length of service, the less likely the worker is a casual employee
- Hours rendered per week — the longer the hours worked, the less likely the employee is engaged in casual service
- Starting and finishing time(s) — more consistency in hours means the employee is less likely engaged in providing casual service(s)
- Whether or not work is defined by an already published roster system — the worker is less likely a casual employee if his or her hours are more regular and planned
- Mutual expectation of continuity of employment — whether or not there is a reasonable mutual expectation of employment continuity dictates whether an employee is casual or otherwise
- Notice required by employer prior to employee’s absence or leave — when said notice is required, the less likely it is that the employee is a casual
- Employee being informed of the casual nature of the employment — if not, reason dictates that the employee is less likely casual
The “standard” casual loading is 25 per cent, and most modern awards provide for the payment of such a loading to casual workers. Generally, the loading isn’t considered a “penalty rate,” as the benefits for which a casual worker is compensated include annual leave, carer’s/personal leave, public holidays, and other relevant entitlements.
Note that the casual loading is usually payable during a period of long service leave. Statutes—both state and federal—normally consider the casual loading a part of the casual worker’s ordinary pay.
From casual to full-time employment
Legislation prescribes that a casual worker engaged and employed on a systematic and regular basis for a sequence of periods of employment within and/or during a six-month period can apply for permanent employment if said employment is still continuing.
Note that as an employer, you cannot simply unreasonably refuse a worker’s application for permanent employment. The conversion from casual to permanent employment, however, is not compulsory or automatic.
Regular and systematic basis: Eligible casual worker
When providing a specific entitlement, the term “eligible casual employee” is used when a casual worker is able to gain access to employment entitlements such as parental leave and unfair dismissal, as provisioned by the Fair Work Act.
A casual employee becomes eligible when he or she has been engaged by an employer on a systematic and regular basis of employment for a sequence of periods (for parental leave, more than 12 months), and who still has a reasonable and valid expectation of continued employment.
In taking on this provision, be sure to consult with a trusted lawyer with expertise on the subject matter, to assist you in understanding the specific legal considerations.
The following criteria have been identified by the Fair Work Commission as valid considerations when determining whether a casual employment is regular and systematic:
- Regular work is offered to the casual employee
- When offered work, the employee generally accepted said offer, or, the employee could be expected to accept said offer
- The casual employee’s total hours worked is similar to the ordinary hours rendered by or expected from a full-time employee, thus an evidence of work on a regular and systematic basis
- There exists some system to the employment to which the casual employee expects or could expect to be offered on a weekly basis. Of course, it is a given that the amount of work may vary depending on the client/employer’s needs, but generally, work takes place each week. Also, the only absences are when the employee requests leave of absence, or due to the annual close down over the holiday periods—Christmas and New Year’s
- There is evidently an established pattern or system where the casual employee is offered regular work where there is client/employer demand and said employee accepts or would accept said offer
- Generally, the casual employee works as part of a regular crew and expects work on particular days of the week; the work also tends to be planned beforehand and labour requirements are known in advance—again, an evidence of a regular and systematic employment
- There exists a clear pattern of work offered in reasonable frequency, and said offer is then generally accepted by the casual employee
- The client/employer expects or has a reasonable expectation that the casual employee would accept the work being offered—thus, the pattern of employment isn’t irregular, informal, or occasional
- There is an established roster of and regularity to shifts, and start and finish times—again, evidence of a regular and systematic work
- There is/was reasonable expectation of ongoing employment during the period or course of the employment
- There is evidence that supports the finding that there was reasonable expectation of ongoing employment on the same basis as had been occurring during the period or course of the employment
Observe that the recurring factors to be considered are that the casual worker is regularly offered work when it is available, and said worker came to expect such offer.
It is also important to remember that more than the intentions of both you, as an employer, and your casual employee, the Fair Work Commission will focus on what actually transpired during the period of casual employment.
Thus, what really happened weighs more than what you and your casual employee originally/initially intended. It is better to understand and completely adhere to these provisions than suffer the consequences of being accused of—and worse, proven to have initiated—unfair dismissal.
Your thorough understanding of all the above considerations and legalities will no doubt enlighten your conduct of business, especially when engaging the services of casual employees.
You now realise that how you actually proceed with engaging casual employment is more important than your intended or planned course of action.
Also, consult with your lawyer and other relevant professionals on the intricacies and legalities of leave entitlements, minimum payment, overtime (if this is a reality in your business/company), public holidays, superannuation, and even meal breaks.
Again, it cannot be overstressed that a well-informed understanding and observance of all these legal promulgations will no doubt set you on the right side of the law, and will make it much easier and convenient for you to engage the services of your casual employees.