Are you too casual with casual employees?
Employers need to understand that by simply calling your employee a casual and paying them according to the recommended rate for a casual employee (including a 25% loading), does not make them a casual employee.
Being too casual with casual employees can prove financially disastrous.
If the employment is deemed to be not casual by nature, then the entitlements associated with Full time / Part time employment would apply. This would result in the payment for accrued annual leave entitlements along with other entitlements such as payment in lieu of notice, not to mention any pecuniary penalties that may also be applied.
At what stage does the relationship go from casual to permanent employment?
With the passage of time, a relationship can change to become one of permanent employment when the casual is performing their duties with regularity, which was a key factor in the following decision by the Federal Court.
In a decision of the Federal Court of Australia in Williams v MacMahon Mining Services Pty Ltd  FCA 1321, the Federal Court upheld the findings of the trial court which found that Mr Williams, a casual worker was not a casual and as a result was entitled on termination to pay in lieu of notice and payment for accrued annual leave. One of the key factors to support this decision was the regularity of Mr Williams’s employment.
This decision highlights the need to ensure that parties to an employment contract cannot simply call their relationship “casual” and expect their intentions to prevail, if a court does not regard the relationship to be truly ‘’casual’’.
In Ponce v DJT Staff Management Services Pty Ltd  FWA 2078, the Commission established the following principles:
- “a casual employee that works varying hours from week-to-week or month-to-month, and / or has different starting and finishing times, is not conclusive evidence of irregular non-systematic employment
- unpredictable but frequent casual work may constitute regular and systematic employment
- if the number of hours worked are small, and the gap between days and times worked is long and irregular, this is evidence of an irregular and non-systematic casual employment.”
Courts will look beyond the mere words of a contract/payslip advice etc. to determine the true nature of the relationship.
Employers who employ casuals are advised to be vigilant and regularly examine the employee’s pattern of work to determine the true nature of the employment. This is the one way to ensure there is no possible risk of an unforseen claim for underpayment of wages arising out of entitlements of a full/part-time employee who you believed was a casual employee.
If you find that the nature of the employment does not meet the employment type then steps need to be taken to address this and also to accommodate within your business the accruement of entitlements of all employees.
Can a Casual Employee Claim Unfair Dismissal?
Casual employees are entitled to file an unfair dismissal claim if their employment is terminated in circumstances that they believe to be harsh, unjust or unreasonable if they have been working on a regular and systematic basis. They will still need to have served at least the minimum qualifying periods before being entitled to file an unfair dismissal claim.
Minimum qualifying periods
In the case of an unfair dismissal claim, the minimum period of service for an employee to have access to unfair dismissal laws is as follows:
6 months service for non small employers (employs 15 or more employees), or
12 months service if the employer has fewer than 15 employees (deemed small employer).
Employers who are considering terminating a casual employee should also examine the employee’s pattern of work to determine whether he or she may be entitled to make an unfair dismissal claim due to having been employed on a regular and systematic basis.
If you have any queries or wish to discuss any of the above, please do not hesitate to contact the ATA’s Industrial Relations Manager on (03) 9372-1688.