As an Employer, Are You Categorising Your Staff Correctly?

Law Blog

As any business expands, owners or managers may need to take on additional employees. There may be an element of uncertainty attached to this growth, however, and the business will want to be as flexible as possible to keep all costs in check. Many employers may, therefore, seek to take on these additional staff members on a casual basis, but if they do, they will need to be very clear about the terms and conditions. What would happen if they were to treat an employee as casual when, in fact, they were not?

Casual or Permanent

Federal regulations seek to set out whether business owners can classify a worker as casual or whether they should treat them as a "systematic and regular" employee. In the latter case, the individual would show up at certain times, would perform specific duties and may be able to take advantage of certain benefits. Most workers across Australia fall into this category, whether they receive money on a weekly or monthly basis.

A casual employee, on the other hand, may not expect to receive any benefits. They may not accrue any holiday leave or pay, for example. Crucially, the employer may not need to pay certain taxes or benefits to the government, and some companies may choose to go down this route from a flexibility and cost perspective.

Defining a Contract

It is critical, however, for the company to lay out the nature of the employment and to make sure that it is short-term or ad hoc in nature. If the working hours are irregular and there is no suggestion that the work would be ongoing, then they may be able to classify this type of employment as casual.

Going to Court

Over the years, many workers have taken their employer to court to reclassify the nature of their employment and to insist that they were not casual. The court may sometimes side with the worker and insist that the employer pay benefits to the worker, any associated back taxes and, in some cases, a fine.

Avoiding Issues

To avoid this type of situation, make sure that you review each contract regularly and identify the presence of any pattern, should it have developed. You may then need to convert that employee to a more permanent arrangement. Make sure that all of your staff, including managers and supervisors, are aware of the distinction between casual and permanent so that they properly manage the nature of the relationship going forward.

Getting Advice

If you have any doubt about the legality or practicality of your employment arrangements, talk with a commercial lawyer for advice.


6 May 2020

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