Casual Employees or Part time?

Retailers, café owners, restauranteurs, pharmacists and fast food operators were relieved when earlier this year, the Fair Work Commission decided to cut penalty rates, with the changes to be phased in over a 2-3 year period.

Historically, award restrictions and penalty rates have created a disincentive to employing people on the best trading days, Saturdays, Sundays and Public Holidays.

When employing staff, it is also important to understand the relevant Award and to consider whether it may be more cost effective to engage part timers rather than casuals.

Small businesses have tended to predominantly employ people on a casual basis in order to give them greater flexibility. However, casuals may not really give you the flexibility you think they do. Employing people on a part time basis may actually be a more flexible and cost-effective option.

Under the law, employees engaged as casuals but who work for you over a period of time on a regular and systematic basis may be entitled to many of the benefits normally only associated with full time and part time employees.

The Courts have consistently held that ‘true casual’ employment is characterised by informality, uncertainty and irregular work. This means that if you have long term casuals, they may be entitled to parental leave, notice of termination of employment and access to unfair dismissal.

Furthermore, the hourly rate and loading paid to casuals means they are more costly to employ than part-time employees on weekends and public holidays, even after factoring in a part-time employee’s entitlement to pro-rata annual leave and personal leave.

For example, to employ a casual retail employee on a Saturday, the current* hourly rate for a level 1 Retail employee under the Award is $27.11. Meanwhile a part time employee rostered to work ordinary hours on a Saturday would only be required to be paid $25.10 per hour.

Apply the same criteria on a Public Holiday and you will be paying a casual $50.20 per hour while you will only pay a part-time employee $45.18 per hour.

Furthermore, if agreement can be reached with the part-time employee, you will only need to pay the employee $20.08 per hour for their work on the Public Holiday as long as you give the employee the equivalent time off without loss of pay within 4 weeks of the holiday occurring, or have the time added to their annual leave. The true cost in this case would be $20.08 x 2, ie $40.16 per hour, which is a significant saving from the casual rate of $50.20.

When organising your rosters for weekends and public holidays, it may be worthwhile considering these options and utilising part-timers wherever possible.

FOR RETAILERS

The General Retail Industry Award 2010 states:

  • full-time employee is an employee who is engaged to work an average of 38 hours per week.
  • part-time employee is an employee who works less than 38 hours per week and has reasonably predictable hours of work.
  • casual employee is an employee engaged as such. ie A casual employee will be paid both the hourly rate payable to a full-time employee and an additional 25% of the ordinary hourly rate for a full-time employee.

Note: ordinary hours of work for full time and part time employees can be on any day of the week, Monday to Sunday.

 

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