Employers recognise casual employment offers the flexibility to increase staffing levels to cover peak periods of trade, whilst affording the option to reduce wages when things aren’t so busy. But what exactly defines “casual”? And is there any risk in having a long term casual employee?
Most employers know the basic differences between full-time and part time employees: a full-time employee has ongoing employment of around 38 hours each week and part time employees usually work regular hours across a roster of less than 38 hours per week.
The common perception of casual employment is that the employee works irregular hours, has no guaranteed hours of work and, because they don’t get benefits such as sick or annual leave, is entitled to a higher hourly pay rate (called a “casual loading”) than equivalent full-time or part-time employees.
Casual employees therefore, are typically used during peak times (holiday seasons, weekends and nights in the hospitality sector for example), or to cover periods of annual leave or when additional hands are required on a project. Intentionally or otherwise however, sometimes a good casual stays on the roster… and becomes a “long term casual employee”.
Long term casuals are casual employees who have been employed by the employer on a regular and systematic basis for periods of employment of at least 12 months. The term “regular and systematic” is the key term in defining casual employment relationships.
Evidence of regular and systematic employment might include a clear pattern or roster for the hours/days worked. Even where there is no pattern/roster, evidence of regular and systematic employment might be established where:
Employers of long term casuals should be aware that these employees can:
From a risk perspective, a casual employee working full-time equivalent hours under a regular and systematic basis may claim their casual status was misclassified and they were treated as part-time or full-time employees, therefore having access to the same annual leave, personal leave and redundancy entitlements of full-time or part-time employees.
Under some Modern Awards, there is also an obligation for the employer to advise casual employees who have been working for 6 months on a regular and systematic basis that they can elect to convert to full-time or part-time employment. Check the full list of Modern Awards here.
Casual employment can work well for both employers and employees. For employers, having flexibility around payroll costs is arguably the number one attraction of hiring a casual. Employees are often happy to trade off certain entitlements such as annual and personal leave in return for the higher base rate of pay of a casual and the opportunity to work around family responsibilities, study or other work.
Notwithstanding such benefits, smart employers manage the risks around a long term casual employee in the same manner they manage other risks: by seeking expert advice tailored to their business. That’s where Bare Bones Consulting can help. We identify your business risk and growth factors and work with you to manage both. Some might consider a HR Consultant as an expense…we prefer to see ourselves as an investment in your business. Your call.
Give Bare Bones Consulting a call to discuss our range of HR services to help your business succeed.
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