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    Long term casuals: mitigating the risk of a retrospective claim

    Updated: Dec 12, 2019

    Many of our clients have a number of employees who fulfil different roles within their organisation, from full time permanent to part time and casual employees. Often, employees will commence with an organisation as casual, with unpredictable, seasonal or fluctuating hours depending on the needs of the business. However, as time goes on, some casual employees do in fact have regular hours of work, despite their casual employment status.

    It is important for employers to be aware of having 'long term casuals', as this will impact on your obligations according to the Fair Work Act 2010.

    A long term casual is an employee who over a calendar period of at least 12 months has worked a pattern of hours on an ongoing basis and could perform the same work as a permanent employee without a significant adjustment being required. The employee remains a casual employee unless their employment relationship changes with the employer, so that there is a mutual commitment to provide ongoing work on an agreed pattern of hours. The casual employee continues to get there casual loading regardless of how regularly they work or how long they work.

    There are significant risks to organisations who retain long term casual employees, particularly if the employee has not been appropriately managed or has not received clear communication regarding their option to transfer to permanent employment status.

    We recently had a client whose casual employee made a retrospective claim for permanent employment entitlements, due to the implied nature of their long term casual work patterns. How can you avoid this?

    If your casual employees have been working with your business in a regular, ongoing pattern of work, then the first step is to have a discussion with them about their employment status.

    If both parties agree to transfer the employment status to permanent, a new employment agreement will be issued. From the date that this document is signed, the employee will receive the relevant entitlements.

    Often the employee will say, “thanks for the offer, but I want to stay casual, I want the casual loading, and I like the ability to decline shifts to suit my family needs.” In these cases, it is critical that you formally document the fact that you have provided the opportunity for an employee to transfer to permanent, and they have declined.

    An employee that opts to remain casual needs to be aware that by accepting the casual loading, they forego the opportunity to make a retrospective claim for permanent employment entitlements.

    For the employer to remain compliant, it is recommended to schedule a documented discussion with the long term casual employee every 12 months. At this meeting, the agreement for the employee to remain casual should be confirmed in writing.

    At any time after 12 months, a casual employee may request in writing to transfer to permanent. An employer’s grounds to refuse the request must be based on facts or reasonably foreseeable business reasons to not be able to transfer to permanent employment.

    Although we generally think of casual employees as one staffing group, it is critical to delve further and identify your long term casuals. We encourage our clients to proactively approach long term casual staff to discuss their employment status, do not sit back and wait. This encourages positive engagement with your employees and reduces the risk of a costly retrospective claim.

    WorkPlacePLUS can help you meet your employer obligations and mitigate the risk of costly claims. For more information, please contact us today.

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