Employers are ‘oblivious’ to casual employee rights

Casual employees have been a key part of the Australian workforce since the 1980s. However, all these years on, casual employees tend to be unaware of their entitlements.

In 2022, twenty-three per cent of the Australian workforce was employed on a casual basis.

Despite this, according to the Australian Council of Trade Unions (ACTU), casual employees in Australia are paid $11.95 less per hour than permanent employees.

The pay gap of 28.6 per cent between casual and permanent staff has been growing since 2016 and is currently at the highest on record.

A major contributor to the disadvantage experienced by the casual workforce is a lack of education about workplace rights.

According to El Leverington, senior associate in industrial and employment law at Slater and Gordon, “employers often rely on casual employees, particularly young people, not knowing their rights, and can take advantage of that”.

Other times, Ms Leverington said the employers, too, are “oblivious” to the obligations they owe to their casual employees.

Casual employment can benefit both workers and their employers, but not when their rights are being exploited.

Addressing the disadvantages experienced by the casual workforce, who are more likely to be women or younger Australians, will require a better understanding and use of the following workplace rights:

1. Casual loading

To account for the lack of protections afforded to casual employees, such as paid leave entitlements like sick leave and annual leave, they are entitled to a casual loading.

This is a payment given on top of an employee’s hourly rate and is typically 25 per cent.

According to Australian Unions’ The Myth of the Casual Wage Premium, 34.4 per cent of casual employees reported not being paid any casual loading at the time of the Australian Bureau of Statistics’ (ABS) most recent survey. This is in clear breach of the Fair Work Act.

2. Long-service leave

Though the requirements vary between states, most casual employees are entitled to long-service leave across Australia.

In NSW, for example, employees are entitled to two months of paid leave after 10 years of service.

Although that might seem a long time to be casually employed, it is worth noting that close to 60 per cent of casual workers have been with their employer longer than a year.

Many also report permanent hours and pay. This phenomenon has been referred to as the “permanent casual”.

The gulf between the real nature of an employment arrangement and the specific wording used in an employment contract was targeted in the federal government’s controversial Fair Work Legislation Amendment (Closing Loopholes) Bill.

As discussed in a recent HR Leader article, if passed, this bill would expand the definition of casual employment and would require the courts to consider the “real substance” of a work arrangement.

3. Time off

Though casual employees are not entitled to paid annual leave or sick leave, there are some circumstances in which they may be entitled to time off.

For instance, casual employees are entitled to two days of unpaid carer’s leave and two days of unpaid compassionate leave.

Public holidays are also not mandatory unless an employer makes a request ahead of time.

Also, all Australian employees are now entitled to 10 days paid family and domestic violence each year of employment.

4. Overtime

Casual employees are entitled to additional pay for overtime hours.

While the specific entitlements vary between industries, Australian Unions said that overtime should apply to casual employees working over 38 hours per week or 12 hours per day.

Australian Unions also said that overtime should be paid at 175 per cent of the ordinary hourly rate for the first three hours of overtime and 225 per cent thereafter.

5. Superannuation

Casual employees, like permanent employees, are entitled to superannuation.

For casual employees over 18 years old, employers must pay at least 11 per cent of their “ordinary time earnings” to a super fund of the employees’ choice.

Also, casual employees under 18 years old who work more than 30 hours per week are entitled to super payments.

“If you aren’t aware of your rights, you aren’t aware when they’re not being provided to you,” said Ms Leverington.