The coronavirus (COVID-19) pandemic is creating business uncertainty. As a result, businesses are considering how to address employee work health and safety and to reduce their costs. As an employer, you may be undertaking this process. One type of workforce to consider is your casual employees.
This article explains:
- what casual employment is;
- how to address work health safety obligations that relate specifically to casual employees; and
- what you can do to reduce or end casual employees' engagement.
What Are Casual Employees?
A casual employee works irregular hours with no guarantee of ongoing or regular work hours. Both parties may benefit from such flexibility.
For example, as an employer, you are able to offer shifts to employees as and when the need arises; a casual employee may choose to accept or refuse shifts depending on their other commitments.
Casual employment is different to permanent employment because permanent employees work regular hours and have a guarantee of ongoing regular work. In addition, permanent employees receive entitlements such as annual leave and paid personal/carer's leave (known as sick leave).
Because they do not receive these entitlements, casual employees receive a 25% casual loading. This means that a casual employees' rate of pay is 25% higher than a permanent employee's rate of pay.
What Happens to Casual Employees During COVID-19?
Sick Leave and Carer's Leave
Casual employees who are:
- sick and unable to work; or
- are caring for an unwell family member
do not receive any pay for these days off work. There is a risk that they may still choose to work, even if they suspect they have COVID-19, in order to earn a living. As a result, it is important to consider your work health safety obligations to eliminate or minimise risks to health and safety so far as is reasonably practicable.
In practice, this could mean sending a casual employee home if they are visibly unfit for work. Some employers are opting to pay sick leave to casual employees if they:
- are quarantined;
- infected; or
- have to care for others affected by COVID-19.
This incentives employees to stay at home if they are unfit for work including where they suspect they are infected with COVID-19. This goes beyond what is required of employers under the Fair Work Act but speaks to employers' work health safety obligations.
Casual employees are not entitled to notice of termination or redundancy pay. As a result, if you are seeking to reduce costs during the downturn, one option is to no longer engage your casuals, therefore reducing your headcount and payroll spend. Employers must ensure those casual employees are true casuals or otherwise risk claims from the employee in relation to permanent entitlements (like redundancy pay, annual leave, sick leave or notice of termination).
Casuals work irregular hours of work with no guarantee of ongoing or regular work. They are not entitled to paid personal or carer's leave and so, there is a higher risk of them choose to work even if they are unfit to do so. This poses a work health and safety risk not only to themselves, but to you and your employees.
You should consider sending casual employees home if they're unfit for work or financially incentivising them to stay home. If you no longer have enough demand or cannot afford casuals, you may also consider no longer offering them any shifts.
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March 25, 2020 (Updated on August 14, 2020)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.