Are you engaging and paying your casual employees correctly?

Public news

The engagement and payment of casual employees continues to attract interest in media reports and is also an issue consistently raised by members.

Further to earlier MTA articles on cases involving leave entitlements applying to certain casual employees, an example of an underpayment of casual employees was highlighted in a recent case involving the Australian Broadcasting Corporation (ABC). The ABC is expected to fork out $22.9 million this Financial Year to underpaid casuals!

In this instance, casual employees were paid ‘loaded’ flat rates for all hours of work. Unfortunately, the loaded rates did not adequately compensate employees for work performed during weekends and public holidays which formed the predominant portion of their shifts. Essentially, an investigation found that the employees would have been entitled to higher wages under the terms of the governing award as compared to what they were actually paid.

The message to take from the above case is to ensure that any loaded flat rates paid to employees for all hours of work also takes into account the penalty payments that apply to all such hours of work under the relevant award.

Employment Contracts:

It is important that members also enter into written employment contracts with their casual employees specifying the casual nature of their position, the absence of any guaranteed hours of work, and the payment of a casual loading in lieu of paid leave and other entitlements. Properly constructed employment contracts can play a significant role in assisting employers to defend underpayment and other industrial claims. Members should click here to contact the MTA if they wish to discuss this further.

Casual Conversion:

Members are also reminded of the provisions in the Vehicle Manufacturing, Repair, Services and Retail Award 2010 (the Vehicle Award), giving ‘regular’ casual employees the option of electing to convert to full-time or part-time status (as appropriate) after 6 months service with an employer, or after 12 months where agreement exists.

The Vehicle Award sets out the conditions that relate to casual conversion, including the need for an employer to notify a regular casual employee in writing within 4 weeks of attaining the period of 6 months (or 12 months service).

A casual employee who does not respond within a 4 week notice period will be deemed to have elected to remain a casual employee.

In the instance where an employee elects to convert to part-time or full-time and employer agrees to such a request, the parties need to discuss and agree in writing on the new terms of engagement.

The MTA can assist you with a sample letter advising ‘eligible’ casual employees of their right to elect to convert under the Award. Again, you should contact the MTA’s Workplace Relations team if you wish to discuss this further by clicking here.