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Are your ‘casuals’ really casuals?

December 03, 2020

Casual employees are often used as a lawful way of meeting fluctuating work flow demands and needs of a workplace. When taking on casual employees you must ensure that the employee is a truly casual employee in order to meet your legal obligations and protect your business from any risk of non-compliance with employment laws.

The following information sheet will provide guidance as to important considerations when taking on casual employees.

Why is it important to consider casual arrangements?

A number of recent court decisions have highlighted the need to regularly consider casual employee arrangements.

For example, one matter involved an employee who was employed as a casual and was paid a casual loading in lieu of paid leave entitlements, such as annual leave. The employee was provided with a roster a year in advance, where he was regularly rostered on a 7 day on, 7 day off 12.5 hour shift roster.

The employee’s employment was terminated without notice, and after various applications and appeals, he successfully recovered several thousands of dollars from his former employer for leave entitlements, as his employment was deemed to be permanent.

What should be considered?

There are several considerations that should be taken into account when employing casuals, including the following:

  • Does the employee know they’re a casual? Casual employees should be well aware of their casual status, and that there is no ongoing commitment and regularity as to hours of work. A written agreement should be in place (i.e. letter of appointment, employment contract, etc.) specifying that the employee is engaged as a casual, and receives payment of casual loading in lieu of paid leave entitlements and notice, on the condition of being a ‘casual at law’;
  • Is there a commitment as to the duration of the employee’s employment or the days/hours the employee will work? Casual employees should have no firm advance commitment to continuing and indefinite work. If your employee has been provided a ‘guaranteed’ amount of hours, or days on an ongoing basis, or is typically rostered for the same days/hours of work, the arrangement is more akin to that of a permanent status;
  • Can the casual arrangement be otherwise dealt with in a part-time or full-time arrangement? The real substance, practical reality, and true nature of the relationship should be considered on commencement of employment, and during employment. If the arrangement is predictable and can be arranged within a permanent type of employment, it most likely should. For example, if you know the employee will need to work at minimum 20 hours per week for your business on an ongoing basis, a part-time arrangement should be contemplated.

    Importantly an employee who commences as casual, can also morph into permanent status over time if the characteristics of the relationship change, therefore you should be continually monitoring your casual arrangements; and
  • Have you acted upon your casual conversion obligations? All modern awards from 1 October 2018 include casual conversion clauses. Depending on the award after a 6-12 month period of employment, casual employees other than irregular casual employees, have a right to elect to have their contract of employment converted to full-time or part-time employment. The relevant modern award to your employees prescribes a process which must be followed.

Employment laws can be difficult to navigate. If you need further information and advice relating to casual employment, HIA Workplace Advisers can assist.

Contact a HIA Workplace Adviser

1300 650 620

or email