When Casual Employment is Permanent Employment

When Casual Employment is Actually Permanent Employment

Casual work is traditionally performed irregularly, on a roster and without the expectation of continuity. Casual employees are paid a higher rate per hour because they aren’t entitled to set hours and paid annual and personal leave during their casual employment.

However, it is becoming increasingly common for employers to engage casual employees on set hours, even full time hours, without a roster and still call them casual. Many employers do this because they want the certainty and continuity of an employee turning up at the same time everyday without having to commit to the expense of engaging someone long-term. Unfortunately for employers, this picking and choosing of employment terms is often in breach of Australian employment law.

If you have been employed as a casual employee, but you have set hours and the reasonable expectation of ongoing work, you may in fact be a permanent employee. This means that you would have all the rights of a permanent employee including paid annual leave. Read on for more information.

Casual employment under a modern award or enterprise agreement

Casual employment isn’t defined by the Fair Work Act, which can make it tricky for employers and employees to understand their rights and obligations. The Fair Work Commission and courts have to step in to bridge the gap left by the legislators and decide what working conditions casual employees are entitled to.

In 2013, the Fair Work Commission (FWC)* decided that when an award or enterprise agreement defines casual employment, then this definition should be applied when interpreting the Fair Work Act.

*The FWC is not a court. This means that a decision made by the FWC may not be followed by a court on appeal. Importantly, if a case went to court about the definition of casual employment in an award or enterprise agreement, a court may decide differently to the FWC in in the case of Telum Civil (Qld) Pty Ltd v Construction, Forestry, Mining and Energy Union.

This means that if you’re employed under a modern award or enterprise agreement, read it carefully to see if it defines “casual employee”. If it does define casual employee, read that section carefully and have a think about whether your employment fits the definition in the award or agreement. For example, the award or agreement may specify that casual employees can have set ongoing hours and it might say that casual employees must be given the option of permanency after six months or one year of casual employment.

If you think that your employment as a casual doesn’t comply with the definition and terms in the award or enterprise agreement then you should call the Fair Work Ombudsman.

When you aren’t employed under an award or enterprise agreement or casual employee is not defined

If you aren’t employed under an award or enterprise agreement or if ‘casual employee’ is not defined in the award or agreement, the common law definition of casual employee will apply. The common law (decided by a court) definition of casual employment is characterised by the irregularity and unsystematic nature of the work. Casual employment is generally work performed on request by the employer.

There are a number of factors that a court looks at when deciding if an employee is casual, regardless of the description in their employment contract. No single factor is determinative:

  • Whether wages are paid hourly or weekly/fortnightly/monthly (a salary). Wages paid hourly are more consistent with casual employment.
  • The period of engagement. The longer the employee has been employed, the less likely they are to be casual.
  • The amount of work performed each week. A full-time worker is less likely to be casual.
  • The consistency of the hours. The more consistent the work, including starting and finishing times, the less likely the employment is casual.
  • Whether the employee works under a roster system and how far in advance the roster is published. A roster is consistent with casual employment however the further in advance that roster is published, the less likely the employee is casual.
  • Whether the employee and employer reasonably expect ongoing work availability. If they do, the employee is less likely to be casual.
  • Whether and how much notice an employee needs to give before taking leave. Notice and advanced notice is inconsistent with casual employment.
  • Whether the employee was notified that the employment was of a casual nature (irregular, unlikely to be ongoing). If they weren’t informed, they are less likely to be a casual employee.

A court will look at the nature of the work performed and the entire relationship between the employer and employee, not just the contract, when determining the nature of employment.

If a court decides that an employee is a permanent employee, despite being engaged as a casual, the employer will be liable for all of the obligations owed to a permanent employee. This includes paid annual and personal leave as well as certain notice and redundancy requirements when employment is terminated

The fact that an employee is paid a higher hourly wage as a casual will not stop a court from recognising the employee’s rights and ordering payment of accrued annual leave or long service leave.

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