Fundamental five: Common mistakes made by businesses when engaging and managing a casual workforce

04 October 2021

Casual employment can provide much needed flexibility for businesses, enabling them to quickly expand their workforce to meet demand. However, any business relying on casual labour shouldn’t look at it as a quick fix. Getting it right takes planning, paperwork and proactive management.

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The Victorian Chamber’s Workplace Relations team knows and understands all the recent changes that impact how an employer must engage casual employees, as well as the steps a business must take throughout the employment cycle.

Recently, we have seen key changes to legislation and modern awards which impact:

  • How a business engages a casual
  • How a casual worker is paid
  • The obligations and rights to convert a casual employee to permanent employment.

Here are the top five mistakes and traps to avoid when engaging and managing a causal workforce:

#1: Relying on a handshake, who needs paperwork?

You may think getting a contract in place for a casual employee is overkill – well, it’s not. A contract will help you make it crystal clear that the employee is a casual. There has been much litigation and legislation in this area confirming a key feature of casual employment is the absence of a “firm advance commitment of ongoing employment.” A causal employee may be on your books for a long time. Having a contract means you are better placed to demonstrate what the initial offer was.

The contract should address payment, clearly identifying any casual loading.

The Fair Work Act 2009 (Cth) now includes a provision confirming casual loadings may be offset against claims for other entitlements. However, we recommend taking a cautious approach and including a set off clause in your contract too.

#2: Forgetting the CEIS

Don’t know what CEIS stands for? You won’t be the only one. It stands for the Casual Employment Information Statement. It’s new, and as of 27 September 2021, you need to give it to your existing casuals and any new casuals you engage.

The CEIS contains information about casual employment and casual conversion. 

As well as the CEIS, casual employees also need to get a copy of the Fair Work Information Statement.

You can download copies of the CEIS and Fair Work Information Statement from the Fair Work Ombudsman website.

#3: Setting and forgetting

It’s not a case of set and forget. Casual employees have a statutory right to convert to permanent employment in certain circumstances. 

If you have a casual staff member who has been employed for 12 months and during the last 6 months they have worked a regular pattern of hours, they will likely be considered an “eligible casual employee.” This means unless there are reasonable grounds not to make an offer to convert the casual staff member to permanent employment, you are obliged to do so. 

In addition to your obligation to offer permanent employment, some casual employees will have the right to request to be converted to a permanent position.

If you fail to offer an employee the option to convert to permanent employment, or if you unreasonably refuse a request, you will be in breach of the National Employment Standards – that means financial penalties.

#4: Failing to pay overtime, or paying it at the wrong rate

Don’t fall into the trap of thinking that because casuals get the casual loading you don’t need to worry about overtime.

Some awards require casual employees to be paid overtime when they have worked more than 38 hours a week. Check the award! There are different thresholds for employees covered by different awards. Did you know under the Retail Award, an employee is entitled to an overtime payment if they work more than nine hours a day? However, they can be required to work up to 11 hours one day a week without triggering the payment. The awards have changed and will no doubt change again. Make sure you are up to date!

#5: Cleaning up the books

Every now and again a business will ‘tidy up its books' and a casual employee will receive a letter advising their services are no longer required. That’s ok, right? Wrong! A casual employee who has been engaged for at least six months (or 12 months if they are engaged by a small business), may be protected from unfair dismissal. This means if you send a letter in order to ‘tidy up your books,’ you may be hit with an unfair dismissal claim.

If you have casuals who have been sitting on your books for a while, look back and ask yourself: How long have they been engaged? Have they been engaged on a regular and systematic basis? If they have been with you for six months (or 12) get some advice. If you simply send a letter saying we no longer require your services, you run the risk of the Fair Work Commission making an adverse finding and you may have to pay compensation and reinstate the employee.

How we can help

It’s a tough system to navigate. If you require any further information or need a question answered, please get in touch and talk to our expert Workplace Relations Consultants.

If you are a Victorian Chamber Complete Member, make the most of your membership by checking you have signed up to the Modern Award Subscription Service. You will get updates on key award changes to help you stay ahead of the game.

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