August 27, 2018
Are your casuals risky business?
The Full Federal Court recently handed down a decision which will impact the employment of casuals across Australia. Read on to find out what this means for your business.
The Full Federal Court recently handed down a decision which will have wide-ranging implications for the employment of casual employees. Where most awards have defined casual employment as “an employee paid and engaged as such” the recent decision now means that many of your causals could, in fact, be permanent staff – even if you have been paying the 25% loading.
So, what actually constitutes casual employment?
• There should be no certainty about the period of employment; and
• There should be an informality, uncertainty and irregularity about the engagement.
Meaning, if you have a casual employee who works regular hours, or who has an expectation that they will be engaged on an ongoing basis, then by definition, they are no longer a casual employee.
So what are the risks of not addressing these changes?
We know that the FWC is ramping up their random audits of businesses to check for legislative compliance so the risk of getting caught out is higher than ever. If you have casuals in your business who have been with you on a regular, long-term basis, they may qualify as permanent staff will automatically become entitled to:
• paid annual and personal leave (of which the annual leave is payable at time of termination);
• long service leave;
• notice of termination; and
• redundancy entitlements.
In practice, this means that, that your ‘casual’ Office Manager who has resigned after a 10-year tenure, working 4 days a week, is now entitled to:
• 10 years’ worth of annual leave (32 weeks);
• notice period (4 weeks); and
• long service leave (6.4 weeks).
Aside from the obvious financial liability, companies are also at risk of an unfair dismissal claim when terminating quasi-casual staff. This means that due process must be followed to avoid the unfair dismissal minefield (think performance management, improvement plans and proper consultation).
So what do you do now?
Look out for casual employees who may have started working with you as a true casual but now work regular and systematic hours. The outcome of this decision may mean that these employees have quickly morphed from a casual into a permanent employee. If you are exposed, the next step would be to consider implementing a measured and staggered conversion process to minimise your liability.
If you’re not sure whether your business is at risk, or don’t know how to carry out the conversion process, feel free to get in contact with us today.