How “Casual” do I have to be to be a “Casual” employee?
The Answer “Really Casual”!
Australian Bureau of Statistics data confirms that the number of casual employees as a percentage of the Australian workforce has remained steady with the growth in both full and part time numbers over the past two decades. The largest employing sectors for casual employment are noted as the retail and hospitality sectors as well as the agriculture sector. These sectors use casual employment to smooth the peaks and troughs for service demand or in the agriculture sector the seasonal labour demands. Where there is ongoing work that fluctuates in hours day to day the casual arrangement offers an employer flexibility to meet their needs. Constantly fluctuating hours of work are not suitable to offer either full or part time employees as both work by set hours on agreed days. Well that is how it always was.
Up until the last couple of years a casual worker has been classified as such just mainly because they have received a 25% loading in place not accruing both annual and personal leave as well the work being intermittent and uncertain.
Decisions by Fair Work over more recent times has focused more on the nature of the work in that it is irregular and uncertain. Once an employee is seen to be working regularly over six months, not necessarily the same days or hours but just regularly each week, week to week, work is seen as ongoing and as such employees in these circumstances may have a claim for wrongful dismissal as they should have been part time or full time.
Seem confusing? Yes, it can be!
There are a range of factors that are relevant to assessing whether a casual employment relationship is truly casual, and, in each case, these factors make be different and have different consideration given. The accepted determining factors have included:
- the ad-hoc, short term nature of casual employment;
- the payment of a casual loading; and
- the absence of a firm commitment to future work.
Where a casual employment relationship is not truly casual, employment is often described as ‘regular’ and ‘systematic’ casual employment and in such case, the employee may have claim to certain entitlements not typically available to a casual employee including paid leave, and wrongful dismissal. If you are into reading key decisions, I suggest you look at Bayley v Temples on he Fair Work Commission site: https://www.fwc.gov.au/documents/decisionssigned/html/2016fwcfb5506.htm
In this decision the Commission found that Bayley a truck driver employed casually to relieve other truck drivers was found to be employed on a regular and systematic basis even though the hours he worked varied week to week and that he had at a time taken a three week break from work. The key factor considered by the Commission in determining that the truck driver was a regular and systematic casual employee, was the week to week nature of the work, work usually started about the same time and involved the same work for similar reasons. When you stand back and look at many casuals in various businesses I expect that you will see the same sort of qualifiers, often the reason why both the employee likes the work and the employer likes having the employee do the work. The criteria for determining what is truly casual work can be found in the Full Court of the Federal Court of Australia decision of WorkPac Pty Ltd v Skene (Skene).
Award amendments over the last year now incorporate provisions enabling casual employees to elect to request to convert to part time or even full time on a permanent status after a stated qualifying period. There is also an onus on employers to offer a casual worker that qualify this option and not doing so may be a breach of the Award which may result in penalties as well representational damage if found to be the case.
It is very important that employment contracts for casual employees are current to provide the available protection for an employer from retrospective claims by casual employees for payment of leave entitlements where they can be seen as technically an ongoing employee of a part or full time nature. An “off-set” clause can be included in the contract to minimise the effects of such a claim for unpaid leave and other permanent wage entitlements. This clause can reduce a claim by taking into consideration the higher pay paid through a casual loading, when working out if there has been an underpayment of Award entitlements.
So where an employer felt that were saving money by having a casual engaged for a job may turn out to be more expensive, more time consuming than having part or full-time employees.
The real lesson here is making sure that the business understands what type of employment best suits it’s operational needs whether it be full time, part time or casual workers.
Have you reviewed what your casual employee letter of engagement in the past twelve months?
To be sure you are making the right decisions in this area call Chris at HR and HSEQ Consulting on 0437334513.