What type of employees do you need?
The type of employees that you choose to meet your business requirements is a very important decision. Business owners need to be aware of the legal ramifications relating to each employee type and manage them accordingly and appropriately. Businesses should follow ‘best practice’ to reduce the costs, minimise legal exposure and develop an engaged workforce. A well-designed Recruitment Process and New Starter documents also goes a long way to ensure your processes and procedures are effective. This also help integrate new employees for the long haul and not just a passer bye.
Once any employee has been hired, they must be given the Fair Work Information sheet thereby ensuring the employer meets their obligations under the FWA.
Types of Employee’s
- Permanent full-time
- Permanent part-time
- Casual employment
- Fixed-term employment or Fixed-task employment
- Non-employees such as Independent Contractor
- Labour Hire Workers
These employee’s are seen as working on an ‘as needs’ basis with an irregular pattern of work. Each time the casual works it is deemed that they are entering into a distinct and separate contract.
Practically, casual work involves employment for fewer hours than the normal full- time working week. It is normal for casuals to be paid by the hour. As a casual employee there are no accruals of permanent employee benefits such as overtime, annual leave, long service leave, paid personal leave or payment for public holidays.
Their rate of pay does, however, incorporate a loading to compensate for the lack of benefits, which is currently 25%. Casuals have less protection when it comes to dismissal; they are not protected under Unfair Dismissal laws unless they have completed a minimum period of 12 months of service and all casuals are excluded from minimum notice periods.
Unless their relevant award, employment contract or enterprise agreement states otherwise, casual employees can be dismissed at the end of their shift. The rationale for this is that they are typically employed from shift to shift.
Aspects to consider for Casuals and the National Employment Standards
Dismissal of Casual Employees (proceed with caution when dismissing a Casual)
- If the Casual is not exempt from Unfair Dismissal laws they will have the right to claim relief with respect to their termination. Procedural fairness needs to be evidenced and a ‘valid reason’ for the dismissal given
- If the Casual is excluded from Unfair Dismissal laws they may still be able to bring a claim under general protection if dismissed for a proscribed reason such as a ‘workplace right’, discrimination, a breach of contract, award or agreement or a trade practices claim
- Despite the label of ‘Casual’ worker they may bring a claim stating that they are in fact a permanent employee.
Tips for managing Casual Employees
- A letter of appointment should be provided to all casual’s employees. The letter should clearly indicate that the role is casual, that the amount of work offered to the individual will vary from week to week and that work is not guaranteed
- Casuals do not have weekly set hours of work. They should be notified of their hours of work, if any, by the distribution of a roster
- There should be no indication of any kind that casual employees will eventually be moved to a permanent status
- There should be no indication of any kind of any future work beyond one month in advance
- Review casual employee’s employment prior to their six-month employment anniversary or 12 months for small business employees. If a casual has been working on a “regular and systematic basis” for at least six months and the employee has a reasonable expectation of continuing work on this basis then they will have access to unfair dismissal remedies. Even if there has been a short break in the employment the individual will be able to bring an unfair dismissal claim if the total period of employment is at least 12 months. A break of more than three months will generally be sufficient to prevent the employee from bringing an unfair dismissal claim.
- Casuals that perform well can be engaged on a longer basis but care must be taken that the employee only has work rostered week to week and that there has been no indication given of ongoing work or the potential to move to a permanent role.
- If the casual is covered by an Award that gives him or her the right to move to a permanent status then you must ensure that you follow the relevant steps set out in the award or you will be in breach of the award.