Is it necessary for an employer to change casual employees to permanent status if their work becomes regular and systematic?
The answer to this question is impacted by the terms of the industrial instrument and employment contract that governs the employee. In particular, it is impacted by whether the employee is or is not covered by an award or enterprise agreement.
It is possible for an award or agreement covered employee to work on a regular and systematic basis and to continue to be classified as a casual.
Most modern awards and enterprise agreements define a casual as "one engaged as such" or "one engaged and paid as such" or in a similar manner. Employees employed under industrial instruments with such definitions are casuals when they are identified as a 'casual' in pay records and paid a casual loading, regardless of whether they work in a regular and systematic manner.
However, it is important to note that many awards give casuals the right to request to convert to permanent employment after a specified period (typically 6 or 12 months) of regular and systematic employment. Under these award clauses, usually an employer can only refuse an employee’s request to convert if refusal is reasonable in the circumstances.
A few awards define casuals in a more restrictive way and employers with employees covered by these awards needs to adhere to the relevant provisions. For example, clause 12.5 of the Cleaning Services Award 2010 states that "[c]asual employees may only be engaged to perform work on an intermittent or irregular basis or to work uncertain hours or to replace a weekly employee who is rostered off or absent". In this way, casuals who work on a regular and systematic basis under this award would be unable to be regarded as casuals if their manner of work contradicted clause 12.5.
The vast majority of casual employees are award or agreement-covered.
However, if an employee is award and agreement free, the common law authorities on the definition of a 'casual' employee could become the basis for determination as to whether the employee is to be treated as 'casual' or ‘permanent’. These authorities are unclear and contested.
The best way for an employer to minimise the risk of claims by a casual award / agreement-free employee that he or she is in fact a permanent employee, is to clarify in a written contract of employment (signed by the employee) and in pay records that the employee has been engaged on a casual basis, and is paid a separate casual loading. These steps will not completely remove the risk of claims and therefore it is better for employers to avoid engaging casual award/agreement-free employees on a regular and systematic basis.
Casual conversion can be pertinent issue for many employers. For more information on this topic, please see the blog post response -Casual conversion to permanent employment.
For more information about casual employment generally, members can call the Ai Group Workplace Advice Line on
1300 55 66 77.
Clinton is the Publications Manager at Ai Group. He is responsible for a number of key services including Annotated Modern Awards, Workplace Relations Handbooks and the management of Ai Group’s HR and Health & Safety Resource Centres. Clinton has a Masters in Employment Relations and previously held advisory roles with the Workplace Authority and Fair Work Ombudsman.
