Casual Employee Termination
Casual employment provides flexibility for both employers and employees, however, when it comes to terminating casual employees, there are legal and practical aspects that must be carefully managed.
Unlike permanent employees, casual employees do not have guaranteed hours and may not be entitled to the same rights regarding notice periods and unfair dismissal claims, but employers still need to ensure the termination process is fair, transparent, and compliant with Fair Work.
Here’s a step-by-step guide on terminating your casual employees, if you ever need to.
Understand the term
Casual employees work irregular hours and do not have guaranteed shifts. While they are paid a higher hourly rate to compensate for the lack of entitlements (like paid leave), they also have fewer termination of employment protections. The Fair Work Act defines casual employees as those without an expectation of ongoing work.
Meet the minimum entitlements
Though casual employees don’t require a formal notice period, employers must still meet certain obligations. Under the National Employment Standards (NES), casual employees must be entitled to:
- A Casual Employment Information Statement (CEIS) upon hiring.
- Casual conversion rights after 12 months of continuous service, which may impact termination if the employee has transitioned to permanent part-time or full-time work.
Provide adequate notice
For casual employees, termination notice is usually not required unless stated in an award or enterprise agreement. However, it’s best practice to provide reasonable notice if the employment relationship is being ended, especially if the employee has been working regular shifts over an extended period. This practice is good to have if you plan to hire them again in the future.
Determine the reasons
Employers must ensure that they have a valid reason for terminating a casual employee. These can be:
- End of a seasonal or project-based role: Casual employment is often tied to specific periods, like holiday seasons or temporary projects. Once completed, they may not be needed.
- Poor performance: If a casual employee isn’t meeting performance standards, document the issues and provide feedback before making the decision to terminate.
- Reduction in business needs: If the business no longer requires additional staff, a casual employee may be let go.
Document the termination process
While formal paperwork might not be legally required, it’s always a good idea to document the termination to ensure compliance with Fair Work guidelines. This includes:
- A written notice outlining the reason for termination (if necessary).
- A record of any entitlements paid (such as accrued wages or unused annual leave for casuals who transitioned to permanent roles).
Avoiding sham arrangements
A sham arrangement occurs when an employer misrepresents an employee’s status as casual in order to avoid providing permanent entitlements. Employers must be vigilant about ensuring that the employment relationship remains genuinely casual. If a worker is consistently working regular hours or there’s an ongoing expectation of work, they may be entitled to convert to permanent status under casual conversion rules. Misclassifying an employee as casual when they’re effectively working as a permanent employee can result in significant penalties.
To Wrap Up
Handling casual employee terminations requires attention to both Fair Work obligations and best practices. While casual employees don’t have the same protections as permanent staff, following proper termination of employment procedures will help protect your business from potential disagreements.
By managing the termination process thoughtfully, you can maintain a positive workplace culture and ensure compliance with employment laws.
How Does Workstem Help?
Simplify your payroll process and ensure accurate pay rates with Workstem’s automated payroll system. Our pre-built modern award interpretation software covers 122+ awards and 34 EBAs, and keeps you up-to-date with penalty rates and other award entitlements.
Choose between our Standard and Advanced plans, and enjoy a range of benefits such as Fair Work compliance, an employee self-service App, and custom rule set. We have integrated our system with Microsoft and Netsuite to provide you with a complete HR SaaS solution for your business.
Book a free demo with our payroll experts. Experience the efficiency and accuracy of Workstem today!
Read More:
All you need to know: Casual Employment Information Statement (CEIS)
Understanding Casual Employment Rights in Australia
How to Calculate Leave Entitlements for Casual Workers?
Casual Employment and Superannuation: What You Need to Know
Casual workers: Are You Paying Tax Correctly?
Payroll Compliance for Casual Employees in Australia 2024
Efficient part-time employee scheduling and attendance with Australia’s best rostering software
