In Australia, some workers are employed casually, with no guarantee of ongoing employment or agreed pattern of work. Casual work is becoming more common in Australia, even for workers who undertake full-time work. For some workers, casual employment is desirable because it offers flexibility and a higher pay rate. However, a casual worker cannot access all the workplace rights of a permanent employee. This article explains the legal rights and responsibilities of casual workers in Australia.
Permanent vs Casual Employment
The Fair Work Act 2009 defines a casual worker as someone who is:
- Offered employment;
- The employment offer does not give a firm advance commitment of ongoing work in an agreed schedule; and
- The worker accepts the offer knowing these employment conditions.
A casual employee’s work roster can change to suit their employer’s needs. They can choose to refuse a shift or swap shifts with their co-workers. By contrast, a permanent employee has regular hours each week and an advance commitment to ongoing employment. As such, they are entitled to receive notice before their employment is terminated and must give notice before resigning.
A part-time or full-time permanent employee is entitled to paid personal and annual leave. Under the National Employment Standards (NES), casual workers also have leave entitlements, albeit unpaid. Casual workers can access unpaid carer’s leave or compassionate leave, unpaid family and domestic violence leave, and unpaid community service leave. Casual employees can also request flexible work arrangements and unpaid parental leave in certain circumstances. Some states and territories allow long term casual employees to access long service leave.
Casual Workers Receive Loading
Casual workers are typically paid a higher hourly rate than permanent employees for the same work. This casual loading is intended as compensation for not receiving paid leave, termination notice and redundancy pay.
Casual workers Get No Firm Advance Commitment
As noted above, one of the defining characteristics of casual employees is that they receive no firm advance commitment of further work. Four factors define the concept of “firm advance commitment”:
- The employer chooses whether to offer the employee work, and the employee can choose whether to accept;
- The employee is offered work according to operational needs;
- The employment is described as casual; and
- The employee receives a higher pay rate (casual loading) or a pay rate specifically for casual employees.
A casual employee can become a permanent employee. An employer can offer the casual employee permanent part-time or full-time employment at any time. A worker can also become a permanent employee through casual conversion.
Since 2018, all modern awards must have a clause allowing for casual conversion. All casual employees must receive a copy of the casual conversion clause within twelve months of commencing employment. Under this clause, a casual employee who has worked systematic hours for at least twelve months (or six months in some awards) can request to become a permanent employee. This request should be submitted in writing.
An employer can refuse a request for casual conversion only on reasonable grounds. The employer can only deny the request on known or reasonably foreseeable facts. Specifically, an employer must know that the position will be obsolete in the next twelve months, or the employee’s hours or schedule will reduce or change in the next 12 months. When an employer intends to refuse an employee’s casual conversion request, they must first consult with the employee and provide a written response outlining their reasoning within twenty-one days.
The High Court recently handed down a landmark decision on casual employment in WorkPac v Rossato & Ors . In this case, Mr Rossato was employed on six consecutive contracts to work at mining sites, each on an Offer of Casual Employment contract. As a casual employee, Mr Rossato was entitled to casual loading but not statutory entitlements such as paid leave. He eventually left his employment at WorkPac.
Mr Rossato later approached WorkPac, claiming that due to his regular and continuing employment, he was due the entitlements of a permanent employee. WorkPac denied this claim and filed a case with the Federal Court, asking for a declaration that Mr Rossato was a casual employee. The Full Court of the Federal Court of Australia found that Mr Rossato was not a casual employee under the Enterprise Agreement or the Fair Work Act. A decisive factor in the decision was the regularity of Mr Rossato’s employment. The court ordered that he was entitled to retrospective paid annual leave, compassionate leave, personal leave and public holiday entitlements.
However, WorkPac appealed on the grounds that Mr Rossato was a casual worker, or alternatively, that his remuneration exceeded the amount he would have received in entitlements. On appeal, the High Court found that the complainant was a casual employee under the Fair Work Act because:
- He had no firm advanced commitment of work or set working hours;
- He was employed on an assignment-by-assignment basis;
- He could choose whether to accept each assignment offer;
- The assignment could be varied with only an hour’s notice; and
- His contract referenced casual loading or casual wages.
Unlike the Federal Court, the High Court placed little importance on the regularity of Mr Rossato’s shifts. The High Court found that regular employment was not incompatible with casual work. Instead, the High Court found that the employment contract determined the nature of the employment relationship. Based on the employment contract, Mr Rossato was not entitled to paid personal leave, paid annual leave or compassionate leave.
This case emphasises the importance of the contract in defining a worker as a casual employee. The commercial law team at Armstrong Legal can help if you would like further advice on the rights of casual workers in Australia. Please contact the team today on 1300 038 223.