About 20% of the Australian workforce are employed as casuals. Casual employees are often hired when an employer requires someones on an irregular or ad-hoc basis.
There has been a big focus on casual employment a result of the Workpac vs Rossato decision. The Federal court found that an employee of labour-hire company, WorkPac Pty Ltd (WorkPac) engaged and paid a casual was in fact ‘other than a casual employee’. This entitled the employee to annual leave, compassionate leave and personal leave.
The case serves to remind employers about the need to actively manage casual employment arrangements. This means that both parties need to understand and know what to expect in the contract of employment.
What is a casual employee?
Casual workers have no guarantee of ongoing work — unlike full-time and part-time employees. The working hours are not fixed or ‘regular’. They are not entitled to sick leave or annual leave. Casual employees can end their employment at any time, unless notice is stipulated under a specific Award, Employment Contract or Registered Agreement.
Types of employee agreements
There are three different kinds of employee agreements when it comes to hiring casuals:
- Awards — it sets minimum terms and conditions for employees covered by the Fair Work Act 2009. Awards are industry (e.g. hospitality) or occupation-based rather than a particular company. You can find the list of awards here.
- Enterprise Agreements — details the terms and conditions of employment in a particular business or group of businesses. They’re different from awards because they concern the needs of an individual enterprise rather than industry or occupation; or
- Employment Contracts — a verbal or written agreement made between an employer and employee outlining the terms of employment. It cannot provide less than the minimums outlined in any applicable award or agreement or the National Employment Standards (NES).
What to include in a casual employment contract
A casual contract must include the NES relating to casuals. In particular:
- unpaid carer’s leave
- unpaid compassionate leave
- unpaid family and domestic violence leave
- unpaid community service leave
- the Fair Work Information Statement.
Casual employees should be paid an hourly wage rate higher than that of full-time and part-time employees. The rate includes a loading to compensate for the absence of benefits such as annual leave or sick leave.
Ending casual employment
While it’s possible to end casual employment without notice, it’s important to double-check if there are any provisions relating to unfair dismissal in the casual employment contract.
Some casuals may have the right to access unfair dismissal provisions if they have worked for the minimum employment period — usually six months and twelve months for small businesses. In addition, if they have been working on a ‘regular and systematic basis’.
Employers need to check if their casuals have a permanent conversion clause in their contracts. These clauses allow a casual employee who has worked regularly for a given period to ‘convert’ to a permanent employee.
Download PositiveHR’s casual documents
Casual Employment Contract
As a business owner, you need to make sure you are properly protected. Only having a verbal contract means there is no evidence to prove what was agreed.
The greater the risk is of conflict and disputes when you do not have written employment contracts, that clearly articulate the type of employment and relevant terms and conditions.
An employment contract is not only important to protect your business, but it also provides clarity and ensures the employee is fully aware of their entitlements and obligations.
Casual Conversion Form
Some awards require employers to notify a casual employee that they can elect to convert to full-time or part-time employment after a set period (usually 6 to 12 months of regular and systematic employment).
This letter allows you to notify your employees that they can elect to convert their casual employment to full-time or part-time employment.
Need further advice? We’re here to help
Positive HR can help you make sense of employee agreements. If you have any questions, we can help. Simply book in a free 15-minute consultation with one of our Positive HR Consultants