Top 5 tips for navigating the minefield of casual employment

casual

From the myth of ‘casualisation’ to debates surrounding the ‘gig economy’, casual employment and “keeping it casual” has become significantly more complex – and controversial – in recent times. However, the reality is that casual employment is a longstanding and well-established feature of the Australian labour market, and this is unlikely to change. Like any form of employment, it is important for businesses to understand their obligations to their casual workforce (as well as the risks of getting it wrong).

With that in mind, here are five important tips in relation to navigating casual employment:

Tip 1: Understand what you mean when you call someone a “casual”

We sometimes hear members apply the term “casual” to a range of workers who provide services of a temporary or sporadic nature (from “agency temps” to consultants).

Genuine independent contractors (i.e. someone you engage under a contract for services) or labour hire employees (i.e. employees of an agency that you have contracted with to obtain labour), are not the same as casuals employed directly by your business. It is important to distinguish between, and understand the different legal implications of, these relationships.

These distinctions can also have significant implications in the context of bargaining for a new enterprise agreement. Particular care should be exercised in drafting any terms dealing with casual employment, and employers should be cognisant of any terms that may have the effect of restricting their ability to engage labour.

Tip 2: If you are employing someone on a casual basis, ensure you have done this correctly

While there is no statutory definition of the term “casual”, most Modern Awards and Enterprise Agreements contain provisions setting out the various ways in which employees can be employed (i.e. on a full-time, part-time or casual basis). Generally, if you engage an employee in accordance with any applicable casual provisions, they will be a casual employee (irrespective of their hours and patterns of work).

For example, many Awards provide that a casual employee is someone who is “engaged and paid as such”. It is essential to understand and comply with such provisions – otherwise, you may unintentionally create a permanent employment relationship at law.

All employers (particularly of Award and Agreement-free employees) should also be conscious of the common law meaning of casual employment. Where employment status is challenged, Courts will look at all the surrounding circumstances of the engagement and relationship,[1] and may question whether a long-term employee who works regular or predictable hours is genuinely “casual” in nature.

Having clear and accurate casual employment contracts and practices can help mitigate this risk.

Tip 3: Be conscious of casual conversion rights

Many Modern Awards (and some Enterprise Agreements) give casual employees conversion rights – ranging from an ability to request conversion to permanent employment after a particular period, to an automatic right to convert.

It is therefore important to:

  • Be aware of what casual conversion rights, if any, apply to your workforce;
  • Understand when and how such rights will be triggered;
  • Understand what your obligations are to notify or consult with the casual employee about their conversion rights;
  • Understand what your rights are to refuse (if any); and
  • Be proactive in discussing conversion rights with eligible employees, and the implications of this – for example, forgoing casual loading but accruing paid leave.

Employers should also be conscious of the risk that service as a casual be “counted” for the purposes of other service-based entitlements under the Fair Work Act 2009 (Cth) (FW Act).[2]

Tip 4: Just because they’re casual doesn’t mean you can ‘hire and fire’ them without a process

Even if you have genuinely engaged an employee on a casual basis, there are a number of risks associated with simply “firing” a casual employee and/or ceasing to offer them further shifts. For example:

  • if you have engaged a casual employee on a regular and systematic basis (for 12 months in a small business with less than 15 employees, 6 months in other businesses) and they have a reasonable expectation of ongoing employment, they may be eligible to bring an unfair dismissal claim under the FW Act[3]; and
  • if the reason you have stopped engaging the casual employee is an unlawful or prohibited one – for example, because the employee is pregnant or they have a disability – you may be exposed to a general protections claim under the FW Act[4] or a discrimination claim under Federal or State anti-discrimination legislation.

Tip 5: Make sure you are paying your casuals correctly – and be across their entitlements

Casuals are sometimes thought to be entitled to a casual loading only – and not to other loadings, penalties or overtime. However, while casual loadings do not generally “stack” with other loadings or penalties, this is not automatically the case – and depends strongly on the particular terms of any applicable Modern Award or Enterprise Agreement.

Another myth is that casuals are not entitled to any leave. While it is true that under the FW Act, casual employees do not accrue paid annual leave or paid personal/carer’s leave:

  • casual employees who have worked on a regular and systematic basis for at least 12 months, with a reasonable expectation of ongoing employment, are entitled to unpaid parental leave and to request flexible working arrangements under the FW Act. They may also, depending on where they are employed and for how long, be entitled to long service leave under applicable state legislation; and
  • casual employees (irrespective of length of service) are entitled to unpaid carer’s leave, compassionate leave and community service leave under the NES.

 Bonus tip: You should always be clear on why your business has a strategy of directly engaging casuals, and whether this is meeting your operational requirements.

Want more information and tips on managing your casual workforce and all the latest casual (and not so casual) developments? Please join us for Ai Group’s free upcoming webinar, Keepin’ it Casual? Navigating the modern minefield of Casual Employment, scheduled for Tuesday 17 July 11am-12 noon.

 

[1] Doyle v Sydney Steel Co Ltd (1936) 56 CLR 545.

[2] AMWU v Donau Pty Ltd [2016] FWCFB 3075.

[3] Fair Work Act 2009 (Cth), s 384(2).

[4] Fair Work Act 2009 (Cth), Part 3-1.

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Gella Rips
As a Senior Adviser in Ai Group's Workplace Relations Team, Gella advises Ai Group members in a variety of industries on a broad range of strategic and operational employment and industrial relations matters. She regularly represents employers in the Fair Work Commission and other jurisdictions, and has many years of experience partnering with businesses to achieve outcomes that align with their objectives.
Gella Rips

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