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Distinguishing casual workers from permanent employees is crucial for accurate payroll processing. Casual workers are typically employed irregularly or intermittently with no guaranteed hours. Employers pay casual loading – a higher hourly rate – to compensate for the absence of benefits like paid leave. Find out all aspects of casual employment and its payroll processes below.
Employing Casual Workers
A casual employee is someone who does not usually have a firm commitment to regular hours of work, is not guaranteed particular hours and is not on a regular roster. A casual employee can end their employment without any notice unless the award, registered agreement, or employment contract states differently.
Specifically, under the Fair Work Act, a person is a casual employee if:
• The offer of a job does not include a firm advance commitment that the work will continue indefinitely with an agreed pattern of work.
• The job offer is accepted and they become an employee knowing that there is no firm advance commitment.
They are paid for the hours of work they perform and receive a casual loading in addition to their base rate of pay, resulting in a higher hourly rate. This loading is designed to compensate them for not receiving some of the benefits of full-time and part-time workers (for example paid annual and personal leave). Under awards or agreements, the loading may be a percentage of the base rate (usually 25%) or a specific rate for the casual employee. Check the relevant award for the exact rate. Most awards state the minimum number of hours to be paid per shift; for example, the Fast Food Industry Award is 3 hours.
Casual workers may also be entitled to penalty rates, allowances, and other loadings depending on the award or enterprise agreement, for example:
• Working on weekends.
• Working early or late in the day.
• Working on public holidays.
• Working overtime.
Casuals are entitled to the following under the National Employment Standards (NES):
• Casual Employment Information Statement.
• Access to a pathway to become a permanent employee.
• 2 days unpaid carer’s leave per occasion.
• 2 days unpaid compassionate leave per occasion.
• Unpaid community service leave.
• Paid family and domestic violence leave.
In addition, casual employees who have been employed for at least 12 months by an employer on a regular and systematic basis or with a reasonable expectation of continuing employment, had it not been for the birth or adoption of a child, are entitled to:
• Make requests for flexible working arrangements.
• Parental leave and related entitlements.
When to Convert
An eligible casual employee can request to convert to permanent employment after their 12-month anniversary.
To be eligible to request casual conversion, a casual employee:
• Needs to have been employed by the employer for at least 12 months.
• Needs to have worked a regular pattern of hours on an ongoing basis for at least the last 6 months.
• Could continue working these hours as a full-time or part-time employee without significant changes.
A casual employee is not eligible to make a request if, in the last 6 months:
• They have refused an offer from their employer to convert to permanent employment.
• Their employer has told them in writing that they won’t be making an offer of casual conversion because there was a reasonable ground not to make the offer.
• Their employer has refused another request for casual conversion because there was a reasonable ground to refuse the request.
Casual employees who believe they’re eligible to become a permanent employee can make a request for conversion every 6 months. At times employees may still make a request for conversion even if their employer has told them in the last 6 months that they won’t be making an offer of casual conversion. Employees can do this only if the reason for not getting the offer was because they had not worked a regular pattern of work in the 6 months before their earlier request, but they now have. It is important therefore, to periodically review casuals to ensure that they continue to meet the criteria for being genuine casual employees, as conditions can change over time.
The Commission’s changes make sure that awards are consistent with the changes to casual employment under the Fair Work Act that started in March 2021. The changes are different between awards, however most have a minimum process for converting casual employees to full-time or part-time.
See full explanation on ICB resource
