This blog focuses on casual employees and the areas you need to comply with to avoid risk and litigation. Today we’ll discuss the pattern of work, employment agreements, holidays and entitlements. We’ll also look into the threshold for leave and what happens if you have made a mistake.
The nature of their work
A true casual employee is one who works on such an irregular and intermittent basis that there is no pattern to their work.
A causal employee truly works on random occasions and each time they are employed it is a stand-alone engagement. Best practice will see a new employment agreement go out each time that person agrees to work. Standard practice often results in one agreement and sometimes the lines can blur as to when do they start and stop work.
Employment agreements must carefully reflect the situation you have. If you have a true casual employee make sure they are on a casual employment agreement, not a permanent agreement and not a fixed-term agreement.
The employment agreement must be accurate and up to date. Some of the key inclusions within a casual agreement are:
· The employee works on an “as and when required” basis.
· There are no set hours and days of work.
· There is no obligation of ongoing work.
· An employee can decline any pieces of work that are offered to them.
Holidays and Entitlements
A casual employee still has entitlements under the law. First and foremost, you must ensure that you monitor their days and hours of work. If they reach the threshold under the Holidays Act for sick leave, bereavement leave, family violence leave and annual leave then you must provide it. If they are reaching those entitlements it is a good time to review their status – there is a good chance they have crossed over into being a permanent employee.
A true casual employee is paid 8% gross earnings on a pay-as-you-go basis to alleviate the employer’s responsibility for leave. This is on the basis that a true casual employee is unlikely to reach an entitlement to take annual leave and so they’re paid the equivalent amount instead.
All employees have a right to be paid on public holidays, where they work. They will be entitled to be paid at least time and a half (consult your employment agreement or ask if you’re unsure) but they may not get an alternative day if they are truly casual (and the day in question is not an otherwise working day for them). The Holidays Act makes it clear that there is no entitlement to an alternative day if the person only works for the employee on public holidays. Typically, a casual employee does not have an entitlement to a paid day off if they don’t work on a public holiday.
There are guidelines to help you determine what an otherwise working day is, you should look at your employment agreements, patterns and rosters. If you’re still unsure give me a call.
What are the thresholds?
If an employee is meeting this threshold they will be entitled to sick leave, bereavement leave, and family violence leave:
after the employee has completed 6 months’ current continuous employment with the employer; or
if, in the case of an employee to whom subsection (1) does not apply, the employee has, over a period of 6 months, worked for the employer for—
at least an average of 10 hours a week during that period; and
no less than 1 hour in every week during that period or no less than 40 hours in every month during that period.
If an employee works for the employer for a continuous period of 12 months they will be entitled to take paid annual leave (instead of that 8% payment mentioned above).
What happens if I’ve mistakenly paid 8%?
The Holidays Act is very clear that if an employee has reached an anniversary date (12 months) they can take annual leave. If you have been paying them 8% gross earnings on the pay-as-you-go method by mistake you will still have to allow an employee to take paid leave. This, unfortunately, can mean that you’re paying annual leave twice as it can be hard to make deductions or to agree on an overpayment plan in this instance.
It is best to seek professional advice on this matter – after all, would you build a house if you’re not a registered mater builder?