Casual Employees or Part time?

By Gordon Parish

Surf retailers get smashed by award restrictions and penalty rates which create a massive disincentive to employing people on the best trading days – Saturdays, Sundays and Public Holidays. Whilst there has been plenty of talk in recent years about the need for change, significant reform still looks to be a long way off.

Given this, it is important to understand the current legal situation and to know what you can and can’t do under the relevant Award.
Due to the seasonal nature of the industry, surf retailers tend to predominantly employ people on a casual basis in order to give them greater flexibility. However casuals may not really give you the flexibility you think they do. Employing people on a part time basis may actually be a more flexible and cost effective option.

Under the law, employees engaged as casuals but who work for you over a period of time on a regular and systematic basis may be entitled to many of the benefits normally only associated with full time and part time employees.

“Long-term casuals may actually be entitled to things such as parental leave, notice of termination of employment and access to unfair dismissal”.

A recent decision of the Federal Court held that ‘true casual’ employment is characterised by informality, uncertainty and irregular work. This means that if you have long-term casuals, they may actually be entitled to things such as parental leave, notice of termination of employment and access to unfair dismissal.

Furthermore the hourly rate and loading paid to casuals means they are more costly to employ than part-time employees, even after factoring in a part-time employee’s entitlement to pro-rata annual leave and personal leave.

For example, to employ a casual employee on a Saturday, the hourly rate for a level 1 Retail employee under the Award is $25.01. Whereas for a part time employee rostered to work ordinary hours on a Saturday, you will only be required to pay $23.15 per hour.
Apply this same criteria on a Public Holiday and you will be paying a casual $57.88 per hour while you will only pay a part-time employee $46.31 per hour. Furthermore, if agreement can be reached with the part-time employee, you will only need to pay the employee $18.52 per hour for their work on the Public Holiday as long as you give the employee the equivalent time off without loss of pay within four weeks of the holiday occurring, or have the time added to their annual leave. The true cost in this case would be $18.52 x 2, ie $37.04 per hour, which is a significant saving from the casual rate of $57.88.

When organising your rosters for weekends and public holidays, it may be worthwhile considering these options and utilising part-timers wherever possible.

The General Retail Industry Award 2010 states:

  • A full-time employee is an employee who is engaged to work an average of 38 hours per week
  • A part-time employee is an employee who:
  • works less than 38 hours per week; and
  • has reasonably predictable hours of work
  • A casual employee is an employee engaged as such. i.e. A casual employee will be paid both the hourly rate payable to a full-time employee and an additional 25% of the ordinary hourly rate for a full-time employee. Additional complexities apply to the classification of casuals – see article.
  • Note: ordinary hours of work for full time and part time employees can be on any day of the week, Monday to Sunday.
* Gordon Parish runs Allan Hall Human Resource Services, an HR and Safety business on the Northern Beaches of Sydney that provides advice and support to a wide range of businesses around Australia. As a surfer himself, he has a solid understanding of the industry and has worked with many surfing related businesses.