The decision to undertake employment or employ staff on a part-time or casual basis can be confusing and will depend on a number of different factors.
Most Australians are employed in full-time or part-time positions. Full-time or part-time employees accrue annual leave, personal leave and long service and have access to other service-based entitlements such as notice of termination and redundancy pay.
Casual employees are generally employed by the hour or by the day and are less likely to have regular or guaranteed hours of work. Casual employees do not receive entitlements such as annual leave and personal leave but generally receive a “casual loading” to compensate for these benefits and for the insecurity of their employment.
National Employment Standards
The first thing to be aware of is that there is a set of 10 legislated minimum employment conditions known as the National Employment Standards (NES) under the Fair Work Act (the Act). The NES have operated since 1 January 2010 and cover:
• Maximum weekly hours of work;
• Requests for flexible working arrangements;
• Parental leave and related entitlements;
• Annual leave;
• Personal/carer’s leave, compassionate leave and unpaid family and domestic violence leave;
• Community service leave;
• Long service leave;
• Public holidays;
• Notice of termination and redundancy pay; and
• The obligation to provide the Fair Work Information Statement.
These entitlements apply to full-time or part-time workers, however some of these conditions also apply to casuals, such as 2 days of unpaid carer’s leave and 2 days unpaid compassionate leave per occasion, 5 days of unpaid family and domestic violence leave and unpaid community service leave.
Part-time employees work, on average, less than 38 hours per week.
Part-time employees are entitled to similar benefits as full-time employees such as sick leave and annual leave, but on a proportional basis. Part-time employees are also entitled to notice of termination if their employment is terminated, as well as, redundancy pay if their position is made redundant.
Part-time employment is different from casual employment because part-time workers have an ongoing contract of employment.
A part-time employee usually has a regular pattern of work, with the same hours and days each week.
Benefits of part-time employment
Part-time employment can help businesses offer flexibility to their workers, where the employees have school-aged children or have other caring responsibilities. For example, a part-time employee with school-aged children may request that they finish work earlier to pick their children up from school or child care.
There are other benefits for an employer and employees for undertaking part-time work, including:
• For employers, attracting candidates from a wider employment pool where applicants prefer or need fewer hours of work than a full-time role
• Retaining valued employees who may not be able to, or want to, work full-time
• Potentially reducing costs for an employer without reducing staff
• Part-time work could be an efficient way to keep costs down in areas where full-time employment is not required
• During busier periods, an employer may reach agreement with part-time employees to be rostered for additional shifts, if the employees can and want to earn more money for a short period of time
• Greater work-life balance for employees
• For workers, more flexibility to pursue other activities or projects
• Enhancing employee morale, productivity and commitment
• Reduces absenteeism
Disadvantages of part-time employment
There may be some disadvantages to part-time work which employers and employees should take into consideration:
• There may be difficulty in scheduling meetings or coordinating projects
• If there are two part-time employees who ‘job share’, the manager may spend more time supervising two workers instead of one
Casual employment is difficult to define, as the Act does not contain a definition. Unlike part-time employment, casual employment is often not defined in modern awards or agreements other than a casual is “an employee who is employed and paid as such”; or “an employee who is paid and/or employed by the hour” or “an employee whose engagement can be terminated at any time”.
Due to the lack of a definition, courts have traditionally interpreted the term “casual” to mean an employee who works only when required by the employer and for short or irregular periods. However, there are situations where casuals work for the same employer for an extended period, usually referred to as a “long term casual” or a “regular and systematic casual”. These casuals are discussed in further detail below.
Long term vs irregular casuals
There are two types of casual employees. The first is a regular and systematic casual, commonly referred to as a long-term casual. This type of casual works regular hours and has an expectation of ongoing work. For example, a casual employee who has worked Monday, Wednesday and Friday for 3 years.
Regular and systematic casuals have the right to take parental leave and request flexible working arrangements.
The second type of casual employee is an irregular casual. These employees don’t have set hours or an expectation of ongoing work.
Nature of casual employment
A casual employee does not have a firm commitment from their employer about how long they will be employed for, or the days or hours that they will work. A casual employee also has the option to turn down an offer to work for an employer if they are unavailable or do not wish to work.
Casual employees are only paid for the time worked and generally receive a casual loading in lieu of entitlements such as annual leave, personal leave, termination pay and public holidays. Under modern awards the casual loading is generally 25%, however they may also receive a higher rate of pay for work on weekends or outside normal business hours.
Benefits of casual employment
Casual employment can have several distinct advantages:
• Casual employment provides significant flexibility, allowing employers to rapidly adjust staffing levels to match fluctuations in demand for a business’ goods and services
• Casual employees can accept or turn down work as suits their personal circumstances to provide them with greater working time flexibility
• It provides administrative convenience for an employer as there is reduced payroll paperwork and less risk of an unfair dismissal claim if a worker is an irregular casual
• Employers do not need to accrue leave entitlements such as annual leave, personal/carer’s leave
• Casuals receive a higher rate of pay, which they may prefer than accruing leave entitlements
• Casual workers do not need to apply for leave and have the ability to take extended holidays or time off work
• Employers do not need to provide casual employees with notice of termination or redundancy pay
• Casual workers have the ability to work for multiple employers and do not have to provide notice of termination when they leave a job
• It allows an employer to assess an individual’s suitability for a position, before offering a full-time or part-time role
Disadvantages of casual employment
• Casual employment is costly for employers due to the requirement to pay the casual loading
• Casual employees can notify at short notice that they are unable to work, or can potentially be unavailable for work more regularly than full-time or part-time employees
• Casuals can resign from work without notice
• Long term casuals would be entitled to long service leave at the casual rate of pay
• Casual employees may have less job/pay security and may not be able to rely on the hours of work offered due to no guarantee of hours
• It can be difficult for casual workers to plan other commitments as rosters may not be provided with much notice
Further advice or assistance
For further advice or assistance on this topic, or any workplace relations matter, Employment Plus clients who have placed two or more candidates have free access to the Ai Group Workplace Advice Line. Call 1300 862 217, 8.30am– 5.15pm AEST Monday-Friday