It is not uncommon for practices to receive claims of unfair
dismissal and underpayment from casual employees, particularly when the
employment relationship sours or comes to an end. To avoid disputes, it’s
important to be clear about new staff members’ employment status from the
practice staff, such as receptionists and nursing staff, are employed on a
casual basis. This is generally mutually beneficial for everyone – employees
receive a casual loading and employers and employees enjoy flexibility in their
work hours and rostering arrangements.
things can change dramatically if the employer–employee relationship becomes
acrimonious or the employee’s employment ends. Casual employees may claim they
were actually permanent employees and make an unfair dismissal claim against
the practice, and/or allege they were underpaid and entitled to annual leave and
sick leave payments. Therefore, practices need to be clear about whether an
employee is a casual or permanent employee (either on a full time or part-time basis) from the outset, depending upon the
factual circumstances and the reality of what the position encompasses.
Is an employee casual or permanent?
courts and commissions applied a test of “regular and systematic” work to
determine whether an employee was a casual or permanent employee. This
test considered whether the employee worked a regular number of hours each week
or regular shifts during the week. If they fit these criteria, they were most
likely regarded as a permanent employee (this can also include part-time employment).
This changed in
2013 when the Fair Work Commission found that whether an employee is casual or
permanent depends on how those terms are defined under the relevant modern award
or enterprise agreement.
This year, the position
changed again with a decision by the Full Court of the Federal Court. This
found that an employee might be a casual employee for the purposes of award
entitlements (such as a casual loading), but might be a permanent employee for Fair
Work Act purposes (which is relevant for unfair dismissal protections and
annual leave entitlements). It is likely that this recent decision will be
challenged, but it is the current law. In this case, the individual was found
(on appeal) to be a permanent employee for the purposes of the relevant award
and the FW Act. The Court noted that
what typifies casual employment is the
absence of a firm advance commitment to the duration of employment, or days or
hours worked. It also noted that payment of a causal leave loading does
not, in itself, determine the relationship, although it is one consideration.
It is currently
unclear how this decision will play out and if an employer will be liable to
pay a casual loading and other casual entitlements under an award, and also have
to defend an unfair dismissal claim and liability for paying leave entitlements
if the individual brings a claim about their employment. The Federal Government
is currently considering the potential impacts of the decision. Practices can mitigate these issues by considering
the relevant award definitions for casual employees (see below), and whether
there is a risk that casual employment would fail the test set out by the
Federal Court above.
Reception staff and
practice managers are employed under the Health Professionals and Support Services Award 2010.
are employed under the Nurses Award 2010.
A casual employee
is an employee who is engaged to work as a casual employee on an hourly basis. There is no link to the definition of a part-time
employee. This means that a nurse who works reasonably predictable hours may
still be a casual employee.
Unfair dismissal claims
Under the Fair
Work Act, casual employees who work on a regular and systematic basis and have a reasonable expectation of continuing employment on
a regular and systematic basis are entitled to make an unfair dismissal claim.
You should seek
advice before dismissing a casual employee given the risk that the employee may
bring an unfair dismissal claim.
Under the Fair
Work Act, employees other than casual
employees are entitled to paid annual leave and paid personal leave (i.e.
sick leave and carer’s leave). The recent decision outlined above, found the
indicia of true casual employment is “irregular
work patterns, uncertainty, discontinuity, intermittency of work and
unpredictability”.If a so-called casual employee works in a
regular and systematic way and is found to have on-going employment status,
they will be entitled to leave payments (possibly in addition to any casual
loading they are entitled to under the relevant award).
Managing casual employees
consider if the factual circumstances of an individual’s engagement support an
employee being classified as a casual or permanent employee. If a casual
employee brings a claim and is found to be a permanent employee for the
purposes of the Fair Work Act, the practice may have to pay leave entitlements
and be unable to offset the casual loading they have paid to the employee as a
casual. A casual employee may also be able to lodge an unfair dismissal
claim if the practice no longer requires their services.
Cover for employee contract disputes
Your Avant Practice Medical Indemnity Insurance covers
employee contract disputes and will provide defence, advice and support if an employee makes an
unfair dismissal or underpayment claim against your practice. The policy also covers
discrimination complaints. ^Cover is subject to the full terms, conditions and exclusions of
For more information on the modern awards visit: fairwork.gov.au
Download our factsheets Employmentand contractor services agreements or watch our webinar: At
the front line: risk management for practice managers.
^IMPORTANT: The Practice Medical Indemnity
Policy is issued by Avant Insurance Limited, ABN 82 003 707 471, AFSL 238 765.
This policy is available at www.avant.org.au or by contacting us on 1800 128
268. Practices need to consider other forms of insurance including directors’
and officers’ liability, public and products liability, property and business
interruption insurance, and workers compensation.