Termination of a Casual Employee in Australia
Terminating the employment of a casual or permanent employee is a sensitive topic and is probably an undertaking that most people would want to avoid unless absolutely necessary. However, termination of employment is something that is somewhat unavoidable in business, as there will be instances where a team member’s performance is not up to standard, they might exhibit bad behaviors or challenging times might require budget cuts.
Irrespective of the reasons for needing to terminate a team member, you need to be well prepared and clearly understand the steps to follow in order to treat the person with dignity and respect. In this article, we will go over the appropriate way to terminate a casual employee, as well as some other information that might be helpful for you.
Who is a Casual Employee?
Casual employees are team members who have accepted an offer of employment for a job from an employer with the knowledge that there is no commitment to ongoing work with an agreed pattern of work. Casual employees do irregular hours, and their shifts vary from week to week to suit the employer’s needs.
According to the Fair Work Act, a person is considered a causal employee if:
1. they are offered a job;
2. the offer does not include a firm advance commitment that the work will continue indefinitely with an agreed pattern of work; and
3. they accept the offer knowing that there is no firm advance commitment and become an employee.
Under the recent casual conversion laws, casual employees who have been employed for more than 12months need to be offered the opportunity to convert to full-time or part-time permanent employment, however, some eligibility criteria apply.
Risk of Unfair Dismissal
Unfair dismissal is when an employee is terminated from their job in a harsh, unjust, or unreasonable manner. The Fair Work Act 2009 (Cth) (FW Act) provides employees with the right to bring a claim for an unfair dismissal remedy when they have been dismissed or constructively dismissed from their employment.
However, casual employees are excluded from bringing unfair dismissal claims unless they –
• Worked regularly and systematically;
• Had a reasonable expectation of continued employment, and
• Worked for more than 6 months (non-small business employer) or 12 months (small business employer).
If a casual employee meets the above criteria, they are entitled to lodge a claim for unfair dismissal. The outcome of the claim will depend on the individual facts and circumstances of the unfair dismissal case.
Points of consideration
If you are unclear whether your team member is a permanent employee or casual employee, then you should consider the following before proceeding with the termination of a casual employee.
• Did you have a valid and lawful reason for termination?
It is advisable to ensure that the reason for termination not be deemed harsh, unjust or unreasonable. Ensure you have a valid reason related to the employee’s performance or conduct.
• Did you follow a procedurally fair disciplinary process?
Consider notifying the team member of the reason for termination and grant them the opportunity to respond to it. Provide the team member with the opportunity to bring a support person if they request for it.
• Do I need to pay a notice period?
Casual employees are not entitled to a notice period or payment in lieu of notice under the FW Act. If the casual employee is not truly a casual employee and should be classified as a permanent full-time or part-time employee as per the criteria under the FW Act, then a notice period or payment in lieu of notice apply.
• Is redundancy applicable?
Most casual employees are not entitled to redundancy. However, if the casual label is misapplied and the employee is considered a permanent full-time or part-time employee as per the criteria under the FW Act and their role is no longer required to be performed by anyone, then a redundancy situation may arise.
Our previous post on Termination of Employment and Procedural Compliance contains more detailed information regarding the Commonwealth workplace laws. It elaborates on the established rules about terminating employment and how they must be followed in order to ensure termination is lawful and fair.
The basics of a termination meeting
Below are some of the basics when preparing for the termination of a casual employee –
• Support person
Whilst, not a requirement, we recommend offering a support person and it may look better at the FWC if you allowed the team member to have someone there for emotional support.
• 24 hours’ notice
Provide the team member with 24 hours’ notice of the meeting so that they can find a support person if they so desire.
• Empower the managers to advise of termination
The team member’s manager should be encouraged and coached on how to best deliver the termination to their direct report. After all the team member reports to them.
• Keep it to the point
It’s best to cut to the chase in this situation and mention termination as soon as possible. Share the decision to terminate their employment with the team member and explain why but don’t go into excessive details unless the situation warrants it.
In the circumstance where you need to proceed with the termination of a casual employee, first and foremost ensure they are a casual employee as per the criteria under the FW Act. Seek out assistance from us, should you have doubt about whether your team member is a casual employee or not.
In the instance that the team member is, in reality, a permanent employee despite the ‘casual’ label given to them, it is critical to ensure that the termination of employment is for a valid reason and certain rules such as notice, and final pay (severance pay) have to be adhered to.
Termination of a casual employee is not a pleasant process; however, we believe that it is always best to treat team members with respect and dignity when terminating their employment. Our HR consulting in Melbourne and across Australia can help navigate you through the process, call us today if you need assistance.