Employers should familiarise themselves with these standards and minimum conditions and keep abreast of any changes, particularly to minimum rates of pay contained in the employee’s Modern Award.
In the past, determining the existence of casual employment relationship was no easy feat. Luckily, the Fair Work Act was recently amended to provide a clear definition of casual employee. A person is now considered a casual employee if they accept an offer of employment without a “firm advanced commitment to continuing and indefinite work”. In practice, casual employees are generally offered hours of work on a ‘as-needed’ basis and reserve the choice whether to accept or not. They can be terminated with little or no notice.
Casual employees are not entitled to all the benefits available to permanent staff such as sick and annual leave. However, their pay rate is boosted with an extra percentage loading to compensate for these lack of benefits.
You must ensure you casual employee is not actually a permanent employee . You cannot contract out of the rights associated with a permanent employee.
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The Fair Work Act 2009 relating to Casual Staff(Cth)
Employers are given a broad scope for discretion in hiring casuals, who are offered few entitlements compared to permanent employees. For this reason, awards impose a loading on the rate of a casual’s wage. Pay loadings of at least 20% on the basic rate of pay are required to be paid (section 294). The national minimum wage order must also set the casual loading for award/agreement free employees (section 294(1)(c).
Modern award minimum wages include casual loadings (section 284(3)(b)). The new ‘modern awards’ that have taken effect in 2010 have increased the loading to 25%. This is to compensate the casual for the fact he or she is not entitled to annual leave, sick leave, and severance pay if the position is terminated.