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As a result of government restrictions across the country, retailers have had to adapt and make significant changes to employees’ hours of work, duties and the way work is performed while balancing the peaks and troughs of customer demand. In most cases, casual employees were the first to lose employment.
Nevertheless, casual employment is, and will remain, a key feature of contemporary workplaces, designed to provide both employers and employees with flexibility, depending on the operational requirements of the business and needs of the casual employee.
However, the current environment – where the majority of retail businesses are struggling to manage the impacts of Covid-19, as well as recent cases from the courts in respect to casual employment – will likely change the way retailers manage their casual staff in the future.
What is casual employment?
Generally speaking, a casual employee has no guaranteed hours of work, usually works irregular hours, is paid by the hour and is not entitled to some of the benefits permanent employees receive, such as paid personal or annual leave, redundancy pay and notice of termination.
Casual employees are generally entitled to a “casual loading” of 25 per cent, given they do not receive benefits of permanent employment outlined above.
However, where a casual employee has been employed on a “regular and systematic” basis, and has a reasonable expectation of ongoing employment, they may be eligible:
- to bring an unfair dismissal claim if they believe their employment has been terminated unfairly;
- for long service leave under applicable state/territory legislation;
- to request flexible working arrangements under the Fair Work Act;
- to unpaid parental leave; and
- to request to convert to full-time or part-time employment, in accordance with an applicable award (including under the General Retail Industry Award) or enterprise agreement.
Long-term casual employees may also be eligible for the JobKeeper Scheme where they have been engaged for at least 12 months on a regular and systematic basis and were employed on March 1, 2020.
For casual employees engaged on a regular and systematic basis, there is a risk that the employee could be deemed a permanent employee (and therefore entitled to permanent entitlements) even if they are engaged on a casual basis and paid an increased rate of pay.
In two recent landmark cases regarding casual employment of Workpac Pty Ltd v Skene (2018) and Workpac Pty Ltd v Rossato (2020), the Federal Court upheld the definition of a casual employee to be an employee who has no “firm advance commitment” from their employer to continuing and indefinite work. Importantly, the Court found that it was necessary to consider the employment relationship as a whole and references to “casual” in employment contracts were relevant but not conclusive considerations.
In both cases, Workpac employees Skene and Rossato were engaged on a casual basis and paid a 25 per cent casual loading, but they had regular and predictable employment with “contractual” hours of 38 hours per week and allocated up to 12 months in advance. There was an expectation that the employees would be available on an ongoing basis; they had no choice in respect to working arrangements and were unable to accept or decline shifts.
The court found that both employees were permanent, despite Workpac engaging them as casual employees, and were entitled to permanent entitlements of annual leave, paid personal/carer’s leave, paid compassionate leave and payment for public holidays.
Workpac sought to argue that the casual loading paid to the employees should be set off against the payments for leave entitlements they were owed. This was denied by the court for a number of reasons, including that the contracts did not sufficiently identify the casual loading.
There is no doubt that these decisions could have significant implications for Australian employers that engage casual employees, and this has been received with widespread concern by employers.
Based on these developments, it is more important than ever to ensure proper onboarding processes take place for casual employees, including written employment contracts which firmly establish their casual status and entitlements. Where practicable, avoid providing casuals with a “firm advance commitment” of ongoing and indefinite work.
Further, if employees would be more appropriately engaged as permanent employees (that is, if there is that advance commitment to ongoing and indefinite work), consider converting their employment from casual to permanent.
Hours and redundancy
With cases of Covid-19 on the rise again in some states, many retailers have continued to see a drop in customer numbers. This has inevitably resulted in restructures, reductions in staffing levels and in some cases redundancies.
Due to the nature of casual employment, generally speaking, employers have the right not to offer casuals shifts or the same hours they were receiving prior to the Covid-19 pandemic. Further, under the National Employment Standards, casual employment can be terminated immediately without notice or payment of redundancy due to a deterioration of business conditions.
However, employers should be cautious where offering less work or terminating long-term regular and systematic casual employees if the employee is covered by an award (including the General Retail Industry Award) or enterprise agreement, since the employer may be obliged to consult with the employee regarding any major workplace change, including redundancy or diminution of work opportunities. A failure to follow proper processes in this respect may leave the employer vulnerable to an unfair dismissal claim.
Fortunately, not all retailers have been negatively impacted by the pandemic, and some have even seen their customer bases grow. Many businesses have swiftly transferred to an online delivery model to counter the reduction of customers in their stores, but this has meant a change to the workforce composition: a reduction in sales assistants and an increase in warehouse and distribution staff.
There has also been a rising demand for essential items during the pandemic, such as food, face masks and hand sanitisers. Here, employers have been able to utilise the flexible work of casuals as operations and production increase.
When staffing levels need to be ramped up, employers can increase casual employee hours, so long as it is in line with their employment contract, award, enterprise agreement or other legislative requirements.
However, the nature of casual employment means that employees are able to accept or reject shifts as they wish. Casual employees cannot be forced to work a certain number of hours and cannot be disciplined if they reject shifts (although they can be disciplined for breach of processes such as not notifying their employer if not attending work).
Where casuals are willing to increase their hours, employers should bear in mind health and safety considerations, such as not working excessive hours, having adequate breaks between shifts and hours should still be reasonable.
Overtime and penalty rates may still apply to casuals under the applicable award or enterprise agreement.
The impact of the pandemic
As casual employees are being used to enhance flexibility in these times of uncertainty, employers also need to consider the personal impact of casual employment. Casuals have no underlying right to paid personal or carer’s leave should they, or one of their family members, become sick.
If infection rates increase again and restrictions around self-isolation are implemented, casual workers are without their regular pay. Of concern is that employees may still attend work even when sick where they need to support themselves financially. In these circumstances, employers must consider their health and safety obligations to reduce risks in the workplace so far as is reasonably practicable. Employers may consider offering paid leave where casuals have symptoms of Covid-19 or they need to care for someone in their household who is sick.
They might also consider directing employees to where they can find government support. Some states are offering financial help to those in insecure work who would otherwise not be paid when sick.
Finally, to conclude, casual employment provides a large degree of flexibility in workplaces which is beneficial in the current environment. However, employers should be mindful of the personal impact on casual staff and mitigate hardships where possible.
As retailers navigate the unique challenges created by the pandemic, more than ever, employers need to plan for different eventualities while also showing compassion and understanding to all staff.
Georgie Chapman is a workplace relations and safety lawyer at HR Legal, which works with many organisations in the retail industry. www.hrlegal.com.au