Casual Employment Contracts and Casual Employees

Casual Employment Contract Template Download

Distinguishing between casual and permanent employees can be confusing and there is no definitive legal test. The term ‘casual worker’ is not a precise legal term but rather a colloquial expression.

It is estimated that around 26% of the total workforce in Australia are casual employees. Women and young people as well as those nearing retirement are strongly represented amongst this group. The average job duration for a casual is nearly three years.

Although a precise definition eludes the term ‘casual’, it is accepted that a casual is hired on an informal, uncertain and irregular basis. Bar staff or shop assistants who are never exactly sure when they will be required for work are prime examples. Casual positions are sometimes used to trial workers and permanent work is offered as a reward for good performance.

The main characteristics of casual employment are:

• No entitlement to overtime, holiday, sick or parental leave;
• Casual loadings in compensation for a lack of entitlements;
• Irregular patterns or rosters;
• Hourly pay rates;
• Irregular hours or less than full-time employees;
• No expectation of ongoing employment; and
• Series of separate contractual engagements.

In essence, a regular and systematic engagement with a reasonable expectation of continuing employment are not usually characteristic of casual employment.

There are, however, so-called ‘permanent casuals’ in the Australian labour force or workers who have ongoing and stable jobs but are treated legally as casuals. Some casuals are better categorised as ‘permanent casuals’, whose hours or rosters may vary to some degree, subject to demand. The most common definition in awards refers to a casual as ‘engaged and paid as such’.

A distinctive feature of casual employment is that there is a separate contract of employment, each time the employee accepts an offer. The casual employee is given no guarantee of future employment and each contract effectively has a short fixed term. Whether or not a single contract is involved, or a series of them, the casual employment engagement is determined by the irregularity of the hours of work, any applicable award definition, the number of hours worked, and availability as and when required.

The Fair Work Act 2009 (Cth)

There is no definition of ‘a casual’ in the Fair Work Act (the Act) and employers are given a broad scope for discretion in hiring casuals, who are offered few entitlements compared to permanent employees. For this reason, awards impose a loading on the rate of a casual’s wage. Pay loadings of at least 20% on the basic rate of pay are required to be paid (s 294). The national minimum wage order must also set the casual loading for award/agreement free employees (s 294(1)(c).

Modern award minimum wages include casual loadings (s 284(3)(b)). The new ‘modern awards’ that have taken effect in 2010 have increased the loading to 25%. This is to compensate the casual for the fact he or she is not entitled to annual leave, sick leave, and severance pay if the position is terminated.

There are important distinctions between casual and permanent (including full-time and part-time) employees. The entitlements for casuals under the Fair Work Act 2009 (Cth) are as follows.

What does a casual miss out on?

If a casual is engaged by a ‘national system employer’, The National Employment Standards in the Fair Work Act (which commenced on 1 January 2010) provide that he or she is not entitled to:

• annual leave (s 86);
• paid/carer’s leave (s 95);
• notice of termination or redundancy pay (s 123(c));
• paid community service leave or paid jury service leave.

More information on casual employee entitlements can be found in RP Emery and Associates Casual Employment Kit.

- Casual Employee Contract -