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Clarifying Casual Employee Entitlements
We often receive questions from clients in regard to casual employees and whether, as an employer, they are upholding their portion of the employment relationship.
There are many advantages of employing workers on a casual basis under a casual employment agreement. This can particularly benefit small to medium sized enterprises, as employers can ask employees to work when and if they need them, meeting business needs while not leaving the business out of pocket. In this progressive world, casual employees help facilitate the introduction of new roles into a business. Where the business at present may not require a permanent position for the job to be completed, employers may anticipate that it will require a permanent position in the future and having a casual employee until then will provide a good basis for the development of the role.
This is an example of one of the advantages of employing casual employees - and there are many others. By no means does this suggest that casual employees should be employed in place of permanent employees. It is important that employers employ casual employees for the reason of being called upon on a casual and ‘as required’ basis. Businesses begin to sway away from upholding their part of the employment relationship when a casual employees’ hours become more regular, and this is where issues arise with employees receiving their entitlements.
Annual Leave and Sick Leave
As you may be aware, casual employees tend to have fewer entitlements than permanent employees, but this does not mean they are excluded from receiving annual leave. Annual leave is often calculated at 8% of and in addition to the ordinary hourly rate or salary of the employee.
Given a casual employee has worked for a business for 6 months, they are entitled to sick, bereavement and domestic violence leave. This is provided that they have worked for the employer for a continuous 6-month period or have worked for the employer for an average of 10 hours per week and at least one hour in every week or 40 in every month.
Public Holidays and Good Faith
The more complex issue at play is a casual employee’s entitlement to receive public holidays. This is an entitlement that often slips the minds of many employers, as it is commonly assumed that casual employees are not entitled to public holidays. However, this is not always the case. When this matter comes to fruition, it is vital to remember your good faith obligations as an employer, as good faith underpins all employment relationships.
Good faith: means to deal with each other in an honest, open and genuine way. It requires parties to be active, constructive, responsive and communicative to establish and maintain a productive relationship.
There is no one simple calculation in determining whether your casual employee is eligible for any public holiday entitlements. Employers must take a holistic approach in looking at the casual employees’ employment, on a case-by-case, basis as no two employees are the same. In doing so, there are some clear guidelines you can follow as an employer.
So whether your employee comes to you requesting that they be paid for a public holiday or you are reviewing their entitlements, there are particular considerations that must be given thought before reaching an agreement. These are:
- Review the employment agreement – this document sets out the employee’s obligations and entitlements.
- Review the employee’s usual work patterns – if the employee regularly work Mondays and you have decided not to give them work on the next Monday, which also happens to be a public holiday, you may need to question whether this is acting in good faith.
- Any other relevant factors – such as whether the employee only works when work is available, or they often rely on the same amount of hours each week. Whether it is a reasonable expectation of the employee and employer that the employee would have usually worked that day.
This is not a ‘one size fits all’ approach, which is unsurprising as employment relationships don’t thrive in that way. Remember that it is fundamental to review these factors in good faith by making a decision on them all as a collective. Failing to recognise an employee’s public holiday entitlements is unlawful, so we urge you to carry out your duties in a fair and reasonable way.