What is a Casual Employee?

The term ‘casual worker’ is not a precise legal term but rather a colloquial expression. Although a precise definition eludes the term ‘casual’, it is accepted that a casual is hired on an informal, uncertain and irregular basis.

Bar staff or shop assistants who are never exactly sure when they will be required for work are prime examples. Casual positions are sometimes used to trial workers and permanent work is offered as a reward for good performance.

The main characteristics of casual employment are:

  • No entitlement to overtime, holiday, sick or parental leave;
  • Casual loadings in compensation for a lack of entitlements;
  • Irregular patterns or rosters;
  • Hourly pay rates;
  • Irregular hours or less than full-time employees;
  • No expectation of ongoing employment; and
  • Series of separate contractual engagements

In essence, a regular and systematic engagement with a reasonable expectation of continuing employment are not usually characteristic of casual employment.

There are, however, so-called ‘permanent casuals’ in the Australian labour force or workers who have ongoing and stable jobs but are treated legally as casuals. . Some casuals are better categorised as ‘permanent casuals’, whose hours or rosters may vary to some degree, subject to demand. The most common definition in awards refers to a casual as ‘engaged and paid as such’.

A distinctive feature of casual employment is that there is a separate contract of employment, each time the employee accepts an offer. The casual employee is given no guarantee of future employment and each contract effectively has a short fixed term. Whether or not a single contract is involved, or a series of them, the casual employment engagement is determined by the irregularity of the hours of work, any applicable award definition, the number of hours worked, and availability as and when required.

The Fair Work Act 2009 (Cth)

There is no definition of ‘a casual’ in the Fair Work Act and employers are given a broad scope for discretion in hiring casuals, who are offered few entitlements compared to permanent employees. For this reason, awards impose a loading on the rate of a casual’s wage. Pay loadings of at least 20% on the basic rate of pay are required to be paid (s 294). The national minimum wage order must also set the casual loading for award/agreement free employees (s 294(1)(c).

Modern award minimum wages include casual loadings (s 284(3)(b)). The new ‘modern awards’ that have taken effect in 2010 have increased the loading to 25%. This is to compensate the casual for the fact he or she is not entitled to annual leave, sick leave, and severance pay if the position is terminated.

Termination

Unless a casual employee’s contract or an applicable award or enterprise agreement provides otherwise, casual employees can be dismissed at the end of an existing shift.

Employers need to be fully aware of a casual employee’s entitlements when ending an employment relationship. A casual employee is open to claim that he or she is not a casual but a permanent employee in view of the factual circumstances surrounding the employment. If successful, then access to the unfair dismissal and redundancy provisions would be open.

Ensure your casual employees are aware of their employment status and avoid any missunderstanding by defining each parties rights with a Compliant Casual Employment Agreement. Kits available here

 

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