CASUAL OR PERMANENT EMPLOYEES

Are your Casual Employees Actually Permanent Staff Members?
It’s easy to fall into the trap of classifying employees in your business as casual even though they’ve been with you for a while. You need to be aware, that at some point or other these so-called casuals may actually be classifiable at law as permanent employees entitled to normal full time employee entitlements.

So how do you know whether or not your employee qualifies as a casual employee?
The basic characteristics of a casual employee is that the days, hours and shifts worked in casual employment are irregular. Casuals do not have the right to ongoing work and their shifts can be cancelled. They can even be sent home early if they are not needed in the workplace! Casuals are not entitled to paid annual leave, public holidays or sick leave but are paid a higher hourly rate to make up for this. Casual employees employed for short periods of time are exempt from the unfair dismissal provisions under the Workplace Relations Act 1996.

It’s likely that your casuals have had their employment transformed into a permanent employment relationship if:

1. they work regular hours each week;
2. you and they have a mutual expectation of continuity of employment and the employee has a reasonable expectation that work is consistently available;
3. you require notice from them before they take leave of absence; and
4. this relationship continues over time.

If your casual employees are characterisable as permanent employees you may find yourself being required to pay them their annual leave entitlements and provide them with sick leave. You may also find that you are no longer protected by the unfair dismissal claims exemption described above. And if they earn less than $450 per month then as a casual you do not have to pay any compulsory superannuation, whereas if they become permanent then super is payable.

To avoid being put in a position where your employee’s casual status is put in question you do the following:

1. advise the employee that the employment is on a casual basis;
2. confirm the employee’s casual status at regular intervals and make sure that they know that they will not be working on days where there is no work available;
3. ensure that your employee is aware that they do not have to give you notice for any leave of absence;
4. be aware of the implications for termination of employment if the casual employee works a regular pattern of hours with a reasonable expectation of continuing employment for a specified period (say 6-12 months); and
5. check any relevant awards or agreements for casual entitlements in your industry.

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