Changing the ball game: Impacts of Casual employment for an Employer

A large number of employers find it easier to hire employees as ‘casuals’. The truth is, long term/regular and systematic ‘casuals’ could, in fact, be classified as permanent employees.

Many employers keep saying to me, “it is easier for me to roster the staff on”, “I can let them go home earlier if I need to”, “they want to stay casual” or “I wouldn’t know what I would do if they weren’t hired casual”. I have always said, if a casual staff member is on the roster, then they are not a ‘true’ casual. A casual is someone who you call up to step in when you need to cover an unexpected absence or need additional help. Casuals have no guarantee of on-going employment.

We understand the needs of a business and how it effects the bottom line. Ultimately, as the business owner, you have the right to outline your expectations and requirements of the business. However, at Key Business Advisors, we want to ensure all employers are doing the right thing and are following compliance requirements.

Recently, the Full Federal Court released a “landmark ruling” which will have range of implications for the employment of casual employees across Australia, in all industries, for an employer. It was found that the Fair Work Commission (FWC) granted a casual worker annual leave entitlements, finding that the employee was working regular and continuous hours, and was therefore entitled to paid leave. The Applicant was entitled to payment for accrued annual leave on termination of his employment totaling almost $30,000.

This “landmark ruling”, which is a decision that is set as a legal precedent, will now give casual employees an opportunity to refer to this case if claiming underpayment in circumstances where the casual employee believes their engagement was on a regular and systematic basis with an expectation of continued employment.

Just because they receive Casual Loading, doesn’t mean they are a ‘true’ casual.

The Full Court held that this decision finds the payment of a casual loading will not displace the payment of a NES derived entitlement, if the ‘true’ relationship is of a permanent nature, and employers may end up paying both. Instead, the Court will look at whether the intent of the parties to make the relationship casual “has been put into practice” by assessing the actual pattern of work.

How does this impact you?

The impact of the decision could be significant for a number of employers. Regular/long term systematic casuals who are indeed permanent will automatically become entitled to:

• Paid annual and personal leave (accumulating for each year of their service);
• Notice of termination; and
• Redundancy entitlements

A regular/long term systematic casual employee may request a form of backpay. Examples or requests may be: working 38 hours of continuous employment from commencement, a regular pattern of work over 13 weeks, consistent number of hours per pay period, or; minimal to no variation in the days worked or start and finish times.

It is important to note that the decision does not require employers to begin backpay of regular/long term systematic casual employee, but to mitigate the risk of any future claims that may arise.

How can Keyba help you?

To ensure you are compliant with the Australian Workplace Laws, KBA can support your business to:

• Review your current rosters and suggest planning/rostering improvements and minimise your people/employment costs
• Transition to permanent discussions with affected employees
• Support in producing employment contracts

Employers should review their casual workforce to establish whether any of their existing casuals are at risk of being considered permanent. Call us on 1300 4 ADVICE to assist you with any queries you may have.