Casual employees are entitled to a range of workplace rights under the Fair Work Act 2009, including protection under the National Employment Standards (NES). While casual work does not include paid annual or sick leave, casual employees are entitled to casual loading, paid and unpaid leave in specific situations, and in many cases, the right to request to convert to permanent employment.
What is Casual Employment?
In contrast to permanent employment (full-time or part-time), a person is a casual employee if from the commencement of their employment:
- they have no firm advance commitment to continuing and indefinite work, and
- they are entitled to a casual loading.
In other words, casual employees are generally engaged on a sporadic, shift-by-shift or roster basis, and paid accordingly, rather than on the basis of a regular pattern over time.
Employers may choose to hire casual employees to meet specific needs of their business, for example, surges in customer demand. Employees may also elect to work on a casual basis due to the ability to accept or reject shifts at will, as unlike permanent employees, casual employees do not need to provide notice to leave their position.
For example, casual employment agreements are commonly used for businesses that hire transient sectors of the population, such as university students in the hospitality industry who need increased flexibility to fit work around their other commitments.
Casual Employee Rights and Entitlements
Casual employees are covered by the National Employment Standards, however casuals do not receive all entitlements available to permanent employees. Instead, casual employees receive a casual loading, commonly around 25 percent on top of their standard hourly rate, to compensate for reduced entitlements.
- Like permanent employees, casual employees are entitled to: ten days of paid family and domestic violence leave per year;
- two days of unpaid carer’s leave per instance, in specific circumstances;
- unpaid leave to engage in eligible community service activities (such as voluntary emergency management activities); and
- maximum weekly hours, which is 38 hours or the employee’s ordinary weekly hours (whichever is less), plus reasonable additional hours.
Casual employees may also be entitled to:
- Unpaid parental leave; and
- Long service leave.
These apply only when the casual employee has worked regular and systematic hours and reasonably expects that work to continue.
Casual employees are not entitled to:
- Annual leave
- Paid personal (sick) leave
- Paid compassionate leave
- Notice of termination
- Redundancy pay
The lack of paid leave and notice entitlements is why casual loading is paid.
Casual Loading: What it Means
Casual loading is an additional percentage on top of the casual employee’s hourly rate. It compensates for the benefits that casuals do not receive, such as annual leave, sick leave and redundancy. In Australia, the common casual loading is 25 percent, although the exact amount may depend on modern awards or employment agreements.
Casual vs Part Time vs Full Time Employment
| Entitlement | Casual | Part Time | Full Time |
|---|---|---|---|
| Paid annual leave | No | Yes | Yes |
| Paid sick leave | No | Yes | Yes |
| Casual loading (usually 25 percent) | Yes | No | No |
| Regular, predictable hours | No | Yes | Yes |
| Notice required to end employment | No | Yes | Yes |
| Permanent conversion | Yes | N/A | N/A |
Changing from Casual to Permanent Employment
Following recent changes to the Fair Work Act 2009, casual employees now play a more active role in any transfer from casual to permanent employment. Rather than the former ‘casual conversion’ process, where employers were required to offer certain casuals conversion to permanent employment under certain conditions, there is now the ‘employee choice pathway’ available to casual employees.
A casual employee may choose to convert to permanent employment if they:
- have worked for the employer for at least 6 months (or 12 months if the employer is a small business employer i.e. with fewer than 15 employees);
- believe their employment no longer meets the requirements of the casual employee definition;
- are not in a dispute with their employer about changing to permanent employment under the employee choice pathway; and
- in the previous 6 months:
- have not resolved a dispute with their employer under the employee choice pathway or had a previous notice under the employee choice pathway to the same employer refused; or
- have not been involved in an unsuccessful process under the previous casual conversion process.
A casual employee who wants to become a permanent employee must notify the employer in writing. In response, the employer must:
- consult with the employee, and
- respond in writing within 21 days.
An employer may refuse to accept the change on the basis that:
- the employee’s employment still meets the definition of casual employment, or
- if reasonable operational grounds exist, or
- accepting the change would not comply with a recruitment or selection process under law.
Disputes about this process can be taken to the Fair Work Commission.
Understanding Risks for Employers
Employers must choose the correct form of employment from the outset. Classifying an employee incorrectly creates a risk of claims, underpayment, and regulatory penalties. Disputes in the Fair Work Commission and Fair Work Ombudsman investigations can be costly and disruptive.
Ensuring the employment agreement reflects the true relationship can save significant time and expense later.
Casual Employment Rights – Quick Answers
Do casual employees get sick leave in Australia?
No. Casual employees do not receive paid personal (sick) leave. Instead, they are compensated via casual loading.
Can a casual become permanent?
Yes. Casual employees may choose to become a permanent employee via the Employee Choice Pathway if eligibility criteria are met. The employer can only refuse under certain circumstances.
Do casuals get annual leave?
No. Casual employees do not receive paid annual leave because they receive casual loading.
How much is casual loading?
The standard casual loading under many modern awards is 25 percent, although this can vary.
Can an employer refuse to make a casual employee permanent?
Yes, in limited circumstances, such as if employment still meets the definition of casual or refusal is based on reasonable operational grounds.
How can MV Law help?
Prior to hiring employees, employers should be aware of the implications surrounding the different types of employment, and the link to their continuing obligations both to the business and to their employees. Employers must ensure that the arrangement is appropriate from the get-go, as making subsequent changes can be both time-consuming and inconvenient. Further, employers risk choosing an inappropriate arrangement that proves highly detrimental to the operation of their business. Defending against Fair Work Commission applications and Fair Work Ombudsman prosecutions should be the last thing on any employer’s mind.
Our experienced employment lawyers can help both employees and employers to understand their rights and obligations in the workplace.
Whether you are a casual employee wanting to understand your rights, or an employer trying to meet your legal obligations, MV Law can assist. Our employment lawyers advise on:
- drafting employment agreements
- casual loading requirements
- the Employee Choice Pathway
- workplace disputes and Fair Work matters
For advice on casual employment rights or workplace obligations, contact the MV Law Employment Team on (02) 6279 4444 or fill in the form and we will get back to you.
MV Law Canberra
Ph: (02) 6279 4444
Email: info@mvlaw.com.au