So, what is the difference between part time and casual employees? This type of employment relationship governs, among other things, what entitlements and protections are available to employees and what obligations are incumbent upon employers.
Understanding the differences between these types of employment is important as assuming or applying the wrong type of employment can have serious consequences, for both employers and employees.
For employers, applying the wrong employment may expose them to the risk of litigation for unpaid or accrued entitlements, and even substantial penalties for breaches of workplace instruments such as Modern Awards or the Fair Work Act 2009. In addition to potentially significant financial implications, such findings are generally public which harms the reputation of the business and can impair an employer’s ability to recruit new staff.
For employees assuming the wrong type of employment may mean missing out on entitlements such as annual and personal leave, working under unlawful or unreasonable conditions, or relying on a protection that they aren’t actually entitled to.
Permanent or Casual?
The main two categories of employment are permanent and casual employment. These labels however can be confusing.
Permanent employment does not mean that the employee is guaranteed their job in perpetuity or that the only way a permanent employee can be dismissed is if there is a valid reason for termination.
Rather, permanent employment simply means that the employee has an ongoing expectation of regular and systematic working hours (which generally includes minimum guaranteed hours).
Permanent employees are expected the hours or shifts allocated to them and require some form of leave, either paid or unpaid, to be absent from work.
Permanent employees are entitled to various types of paid and unpaid leave such as annual leave, personal or carer’s leave (more commonly known as sick leave), compassionate leave, and domestic violence leave.
Permanent employees are in most cases entitled to minimum notice of their dismissal and are usually required to give notice of resignation.
On the other hand, casual employees have no agreed pattern of work and there is no firm commitment or guarantee from their employer to ongoing work. This means that casual employees generally work irregular hours and can elect to take the shift or not.
One of the biggest areas of confusion tends to be the difference between part time and casual employees. While both types generally work less than a full-time load, which is nominally 38 hours per week, the two concepts are not interchangeable.
Part Time Employee
Part time employees are simply permanent employees who work (or are guaranteed) fewer than 38 hours per week.
Part time employees receive the same entitlements and protections as a full-time employee.
Most of these entitlements, such as annual leave, will accrue on a pro rata basis. This means the entitlement will accrue proportional to the hours worked by the employee.
Other entitlements, such as notice or compassionate leave, are the same between part-time and full-time employees.
Casual employees have no agreed of fixed pattern of work and there is no firm commitment or guarantee from their employer to ongoing work. This means that casual employees generally work irregular hours and can elect to take the shift or not.
In theory, a true casual employment relationship means that both parties are free to offer or turn down work at any time without consequence. In practice however this can be a bit more complicated.
Casual employees usually receive a higher rate of pay (also known as ‘casual loading’) to compensate them for not receiving entitlements such as paid sick leave or annual leave.
However, it is important to note that pursuant to the National Employment Standards casual employees are entitled to:
- 2 days of unpaid carer’s leave and 2 days unpaid compassionate leave per occasion;
- 5 days unpaid family and domestic violence leave in a 12-month period; and
- Unpaid community service leave.
Employers are entitled to terminate casual employees without notice. However, this cuts both ways, with casual employees also being able to resign from their job without requiring to provide any notice to their employer.
Conversion to Part Time Employment
Casual employees have a right to convert to permanent part time employment if:
- They have been employed by the business for at least 12 months;
- They have worked a regular pattern of hours on an ongoing basis for at least 6 months; and
- Could continue working these hours without significant changes.
A casual employee can make a request to convert to permanent employment at any time on or after their 12 month anniversary.
Small businesses are not required to agree to a casual conversion.
Summary of Differences Between Part Time and Casual Employees
- No paid leave entitlements
- No firm commitment or guarantee of working hours, can be unpredictable
- No notice period when quitting or being terminated
- Casual loading meaning higher rate of pay
- No redundancy payments
- Paid leave entitlements
- Entitled to ongoing work and set hours
- Notice period based on Award
- Ordinary rate of pay
- Possible redundancy payments
Some Myths and Misconceptions
Many widely held beliefs about employment law are actually incorrect. For clarification:
- Not everyone paid an hourly wage is a casual employee. While casual employees tend to be paid an hourly wage and permanent employees tend to be paid a salary this is not necessarily a fixed rule. A permanent employee may be paid an hourly wage and still be entitled to paid leave.
- Casual employees may be eligible for unfair dismissal or general protections dismissal.
- While the label given to an employee in a contract is an important indication of what the relationship is; it is not solely determinative.
Tom Howard Legal are experts in the field and have a team of Sydney Employment Lawyers to answer any of your questions and assist you in your situation. Contact our team today through our online form, or call the team on (02) 8459 9716.