Guidelines for hiring casual staff in Australia

People management is one of the biggest challenges facing small businesses in Australia today.

Companies with a small number of employees will often require the support of additional staff but may not have the budget to hire employees on a fixed-term basis. This is when hiring casual staff becomes an option.

While they can be a great benefit to a company, changes to Australian legislation means there’s now strict guidelines in place for those who wish to hire casuals on an as-needed basis. Here’s what you need to know.

What is a casual employee?

Thanks to updates of the very important Fair Work Act 2009, the definition of a casual employee in Australia has changed. As of 26th August 2024, a casual employee is defined as follows:  

if, when an employee starts employment:

-          the employment relationship has no firm advance commitment to ongoing work, taking into account a number of factors, and

-         they’re entitled to a casual loading or specific casual pay rate under an award, registered agreement, or employment contract.

An example of a casual employee:

Bob works as a casual employee for Phil and Lisa in their warehouse. Phil and Lisa can choose whether to offer Bob work, as and when they need. Bob can choose to accept or reject shifts on his own terms.

This provides Bob the flexibility to work when he wants/can, while Phil and Lisa have access to an extra employee on an as-needed basis.

Why would a business hire casual staff?

There are many reasons why hiring casual staff is an option for Australian businesses. From cutting back costs, to fixing a staffing issue, or to simply handle an increase in workload.

Hiring a casual employee offers businesses with a greater range of choice and hiring capabilities.

The advantages of hiring casual staff

Flexibility: You can choose to offer shifts as and when necessary. Meanwhile the casual staff member can choose to accept or decline shifts based on their availability.

Cost savings: For businesses with a limited recruitment budget, casual staff can help to bridge workforce gaps, while providing a cost-effective hire option.

Access to a range of skill sets: Often those choosing casual work are skilled individuals with a history of working in different settings.

Changes to the law

Changes to laws that apply across Australia now mean that causal staff are more protected. With a new list of rights and protections, as provided by the clearer definition of the term ‘casual worker’.

The aim of this change in law is to prevent businesses from hiring staff under the ‘guise’ of casual employment, whilst denying workers secure work, employment rights and entitlements.

The rights of casual workers across Australia

It’s important to understand these new rights and your responsibilities as an employer.

• Employment contracts: A casual employment contract is required under Australian law. As a minimum, this should outline the basic details of casual employment. Writing an employment contract, particularly for a casual employee, may require some assistance.

BrightBase is our exclusive library of templates, document guides and more. Including templates for written contracts of employment. Helping to keep you legally compliant whilst reducing time spent on administration tasks.

• Flexible working arrangements: Casual employees in Australia are protected by the National Employment Standards, which states that they can request flexible working arrangements. This also allows them to take unpaid parental leave, under particular circumstances.

• Rosters: Casual employees are not expected to work according to a roster. A set minimum number of working hours may however be required as stated by a specific award or agreement.

• Holiday pay: Casual staff in Australia are not entitled to paid annual leave unless this is stated by the employment contract, award or agreement.

• Sick leave: Casual staff are not entitled to paid personal/carer’s leave unless this is covered by the award, agreement or employment contract.

• Superannuation: The general rule for superannuation payments is that employers are required to pay the superannuation equivalent of 11.5% of an employee’s ordinary time earnings. This includes the basic pay rate for a shift, shift loading payments and more. Keeping up to date with Australian SG laws will help make sure you are working in line with the current laws.

• Notice period: Casual employees are not required to provide a notice nor work a notice period. Choosing to accept, decline or swap shifts as they wish, they may terminate their employment contract at any time. However, as with any casual employment agreement, this may differ depending on the employment contract and the award or enterprise agreement.

• A pathway to permanent employment: The NES in Australia provides terms of the Employee Choice Pathway. This pathway provides casual employees with the opportunity to request permanent employment within a role.

Changing casual employment to permanent employment

Casual employees can now request to change their employment status to permanent employment. However, this employee must have been employed for a total of 6 months (or 12 months if employed by a small business).

As an employer you will no longer be responsible for offering casual conversion. Instead, the employee should write to notify of their request for employment change. It is then your choice whether you opt to accept or reject this request based on certain criteria.

Pay rates for casual employment

While casual employment means the employee has less benefits than permanent, full-time or part-time members of staff, their base pay is typically higher to compensate for this.

Known as casual loading, a percentage increase is added to a casual employee’s base pay.

It’s important that you are aware of this before hiring a causal member of staff, as this could impact your budget or potentially hinder your hiring process.

Need more support?

While hiring casual staff seems like a great idea, before taking the plunge it’s important to know your requirements and responsibilities as an employer. For further information about hiring guidelines and support throughout your recruitment process, do not hesitate to reach out for support from our HR advice line. Available when you need us for 24/7 employment relations advice.