Long Term Casuals – Business Flexibility or Risk?

You can call an apple an orange but if it's really an apple the law is likely to treat it as such. Many businesses engage employees as 'casuals' genuinely believing this will allow flexibility by paying a fixed rate, terminating without notice and reducing the risk of unfair dismissal, only to find that all of these risks remain. Following are just a few common pitfalls where employers may come unstuck in relation to its casuals under the current legislation.

Underpayment Claims

If employees are engaged on a regular and systematic basis for a longer term, the employer may remain exposed to risks surrounding termination of employment including possibility of an under-payment claim on the basis the employee was in fact a permanent employee, albeit that a higher rate has been paid to the employee to avoid this.  Without limitation, such claims may be for annual leave, personal leave, public holiday pay and in the most extreme cases of "long term" causals - long service leave.

Potential Access to Unfair Dismissal

A casual is found to be a ‘long term casual’ employee under the Fair Work Act (“FWA”) and therefore not excluded from access to the unfair dismissal jurisdiction where they have been employed on a regular and systematic basis.

Entitlement to Parental Leave

A casual employee with at least 12 months regular service and a reasonable expectation of ongoing employment is entitled to up to 12 months' unpaid parental leave.

Ability to Request Flexible Working Arrangements 

A casual employee may make a request for flexible working arrangements under the FWA if the employee:

  • is a long term casual employee immediately before making the request; and
  • has a reasonable expectation of continuing employment on a regular and systematic basis.

Conversion to Permanent Employment

Employers may be required to offer a casual employee to convert to full-time or part-time employment after they have been engaged for a specified period of time if provision exists in an applicable modern award.

Consider Your Options Closely

To minimise risks and exposure, employers should carefully and purposefully consider the engagement of each employee at the outset and as it evolves to ensure the payment arrangement and characterisation of employment properly reflect the real nature of the employment.  If they do not, employers should consider strategies and tactics for changing the employment arrangements with such employees or at the very least make an informed commercial decision of the risks of continuing with a "casual" engagement on a regular and systematic basis.



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