Unfair Dismissal And Casual Employees: A Guide For Australian Employers

Casuals can be a great way to keep your staffing flexible - especially when your workload changes week to week, you’re covering busy periods, or you’re still scaling your team.

But flexibility doesn’t always mean “no legal risk”. One of the most common areas of confusion we see for small businesses is the risk of casual employee unfair dismissal claims - particularly when an employer assumes that casual employees can’t bring an unfair dismissal claim, or that ending casual work doesn’t need much process.

The reality is that some casual employees can be protected from unfair dismissal, and the way you manage performance issues, misconduct, roster changes, and ending the relationship still matters.

This guide walks you through, in plain English, when a casual employee might be eligible to make an unfair dismissal claim, what the Fair Work Commission (FWC) usually looks at, and practical steps you can take to reduce risk before you end a casual engagement.

Can Casual Employees Bring An Unfair Dismissal Claim In Australia?

Yes - unfair dismissal claims by casual employees are possible in Australia in certain situations.

A casual employee may be able to bring an unfair dismissal claim if they meet the usual eligibility rules and they were employed on a “regular and systematic” basis and had a reasonable expectation of continuing work.

What Does “Regular And Systematic” Mean?

There’s no single magic number of shifts that makes a casual “regular and systematic”. Instead, it’s about the overall pattern and whether the work looks ongoing rather than truly ad hoc.

Examples that may point to regular and systematic employment include:

• consistent shifts every week (even if the days vary)
• a roster that repeats over time
• being relied on as part of your usual workforce
• working for a long stretch without major gaps
• being expected to be available, and you regularly giving them work when they are

On the other hand, if the employee picks up the occasional shift when they feel like it, with long gaps between shifts and no real ongoing pattern, they’re less likely to be considered regular and systematic.

What Is A “Reasonable Expectation” Of Ongoing Work?

This is about whether, from the employee’s perspective, it would be reasonable to think the work would keep going.

In practice, a casual may argue they had a reasonable expectation of continued employment if:

• you rostered them in well ahead of time on an ongoing basis
• you talked about them having an ongoing role (“we’ll keep you on”)
• you treated them like a permanent team member operationally (e.g. set hours, set days)
• their role wasn’t tied to a short-term project or temporary peak period

This is one reason why your documentation matters. A well-drafted Employment Contract can help clarify the nature of the engagement and set expectations about shifts, availability, and how the relationship may end.

When Is A Casual Employee Protected From Unfair Dismissal?

Even if a casual was regular and systematic, they generally also need to meet other unfair dismissal eligibility requirements under the Fair Work Act.

While the details can be nuanced, these are the big eligibility checkpoints employers should know.

1. Minimum Employment Period (6 Or 12 Months)

An employee must have completed the minimum employment period before they can make an unfair dismissal claim.

• 12 months if you’re a small business employer (generally, fewer than 15 employees)
• 6 months for other employers

For casual employees, this usually involves looking at whether their service was regular and systematic and whether it was continuous in a practical sense (even if there were short gaps).

2. The Role Must Be Covered By The Unfair Dismissal Regime

Some employees are not eligible for unfair dismissal because of their earnings level or employment conditions.

For example, if a casual is not covered by a modern award or enterprise agreement and earns above the high income threshold, they may not be eligible. Many casual roles in small businesses are award-covered, so you should avoid assuming this rule excludes them.

3. It Must Be A “Dismissal”

Ending a casual engagement can still be treated as a dismissal in many circumstances - particularly where:

• you tell them you’re ending their employment
• you remove them from the roster due to performance or conduct issues
• you stop offering shifts in a way that, in substance, ends the employment relationship

Importantly, simply “not offering shifts” isn’t always a dismissal in itself (especially in a genuinely ad hoc casual arrangement). But it can create risk if the casual has been working regularly and systematically, and the sudden removal of shifts looks like a decision to terminate because of a workplace issue.

What Makes A Dismissal “Unfair” For Casual Employees?

If a casual employee is eligible, the next question is whether the dismissal was harsh, unjust or unreasonable.

From an employer perspective, the FWC often focuses on a few practical themes:

Was There A Valid Reason Related To Conduct Or Capacity?

A valid reason often means there was a sound, defensible business reason to end the employment - usually tied to either:

• conduct (e.g. serious misconduct, repeated lateness, refusal to follow lawful directions)
• capacity (e.g. inability to do the job to the required standard, skills gaps, ongoing performance issues)

Importantly, “valid reason” doesn’t mean you need perfection - but it does mean you should be able to point to specific facts rather than vague impressions.

Was The Employee Told About The Issue And Given A Chance To Respond?

Even for casual employees, procedural fairness matters.

In practical terms, that usually means:

• you told them what the concern was (clearly, with examples)
• you gave them a chance to respond
• you considered their response before deciding what to do

If the issue is serious, it can be worth pausing and using a more formal step such as a show cause letter, which sets out the allegations and gives the employee an opportunity to explain why disciplinary action (including termination) should not be taken.

Was There A Warning (If It Was Performance-Related)?

If you’re ending the relationship due to performance or repeated minor issues, the FWC often expects that the employee was warned and given a chance to improve.

Warnings don’t have to be overly legalistic, but they should be:

• clear about what needs to change
• clear about the consequences if it doesn’t improve
• documented (even if it’s a file note confirming what was discussed)

Did You Follow A Fair Process If It Was Misconduct?

Where misconduct is alleged, it’s often risky to terminate on the spot unless it is genuinely serious and you have enough information to justify the decision.

In many cases, the safer approach is to investigate first. Depending on the situation, you may consider taking interim steps to manage risk while you gather facts - for example, temporarily removing the employee from certain duties, or directing them not to attend the workplace. However, a “stand down” is only lawful in specific circumstances (such as where it’s authorised under the Fair Work Act, an award, an enterprise agreement, or the employment contract).

This can be especially important for small businesses, where quick decisions are common - but rushed decisions can create expensive disputes later.

Practical Steps To Reduce Casual Employee Unfair Dismissal Risk

If you regularly hire casuals, the best time to reduce the risk of a casual employee unfair dismissal claim is before there’s a problem.

Here are practical steps many small business employers take to create a safer, clearer framework.

1. Use A Proper Casual Employment Contract

A casual arrangement should be clearly documented from day one, including:

• that employment is casual (and what that means in practice)
• how shifts are offered and accepted
• what the casual loading is (if relevant)
• any probation period (if you want one)
• how the relationship can end

A tailored Employment Contract is also a good place to set expectations around conduct, policies, and communication - which becomes important if you later need to discipline or end the engagement.

2. Be Consistent With Rostering And Communications

If you genuinely want a casual to be “as needed”, your actions should match that intention.

Be mindful of:

• making promises about guaranteed ongoing work
• locking someone into a set roster indefinitely without considering conversion obligations
• treating casuals the same as permanent employees without the same clarity around ongoing work

This doesn’t mean you can’t roster casually on a regular basis (many businesses do). It just means you should understand that consistent patterns can increase eligibility for unfair dismissal claims, and manage the relationship carefully.

3. Document Issues Early (Even If You Think It’s Minor)

Small issues often become big issues when there’s no record of what happened.

Practical ways to document include:

• a short file note after a conversation
• a follow-up text or email confirming expectations for next shift
• saving relevant roster records, incident reports, or customer complaints

This documentation can be crucial if the employee later claims they were dismissed unfairly and you need to show what led to the decision.

4. Use Probation Properly (And Don’t Assume It Removes All Risk)

Probation can be a helpful period to assess suitability, but it doesn’t automatically mean a termination is “safe”. You still need a lawful and fair approach.

Also, keep in mind that the unfair dismissal minimum employment period (6 or 12 months) is separate from any probation period you set in the contract.

If you’re unsure about how to structure probation and what you can do within it, it’s worth getting advice early - especially if you’re considering a termination during probation.

5. Follow The Small Business Fair Dismissal Code (If You’re A Small Business)

If you’re a small business employer, the Small Business Fair Dismissal Code can be an important safeguard.

In broad terms, it provides a framework for fair dismissal. If you comply with it, it can help defend an unfair dismissal claim.

It’s still critical to apply it properly - particularly around warnings, giving the employee an opportunity to respond, and ensuring your reasons for dismissal are clear and evidence-based.

6. Have Clear Workplace Policies (And Actually Use Them)

Even a short set of workplace policies can help make expectations clear and reduce disputes. For example:

• code of conduct and behavioural expectations
• attendance and lateness requirements
• work health and safety processes
• complaints and investigations process

Policies work best when they’re genuinely implemented (not just filed away). If you’re relying on a policy as part of a termination decision, you should be able to show the employee had access to it and it was enforced consistently.

Common Scenarios: Ending A Casual Engagement The “Right” Way

How you should approach ending the relationship often depends on why you’re ending it. Below are common scenarios and practical ways to reduce risk.

Scenario 1: You Just Don’t Need Them Any More

If a casual’s role is genuinely no longer required (for example, your trading hours reduce or a peak season ends), you can usually stop offering shifts.

However, you should consider:

• whether you are ending the relationship for a genuine operational reason (and can show this)
• whether you’re treating the casual consistently compared to other team members
• whether the casual has become “regular and systematic” and may claim they expected ongoing work

If you are uncertain, get advice before you communicate the decision, particularly if the casual has been working regular shifts for a long time.

Scenario 2: Performance Is Not Good Enough

This is a common cause of unfair dismissal disputes involving casual employees, because employers sometimes end the relationship without warning.

A safer approach is to:

1. Explain the performance concerns with specific examples.
2. Set a clear expectation and timeframe for improvement.
3. Provide support or training if appropriate (even light support helps show fairness).
4. Give a warning if performance doesn’t improve.
5. If there’s still no improvement, end the relationship with a clear explanation.

This doesn’t need to be bureaucratic, but it should be structured.

Scenario 3: Misconduct Or A Serious Incident

If there’s alleged misconduct (for example, bullying, theft, serious safety breaches, harassment, or serious insubordination), it can be tempting to remove the employee immediately.

Before you terminate, consider whether you need to investigate first. Where appropriate, you may need to take interim action while you investigate. However, a formal stand down is not something you can automatically do “as a default” - it must be authorised by the Fair Work Act (in limited situations) or permitted under an applicable award, enterprise agreement, or the employee’s contract. In many cases, a show cause letter and a prompt, fair investigation process will be a safer way to slow the process down, gather facts, and make a better decision.

Scenario 4: You Want To End It Quietly By Not Offering Shifts

This approach can backfire.

If you stop rostering someone because of a conflict, complaint, performance issue, or disciplinary issue, the FWC may still treat it as a dismissal - just handled poorly.

It’s usually better to communicate clearly and keep a record of the reason (and any steps you took to address the problem fairly).

Key Takeaways

• Unfair dismissal claims can be possible for casual employees where the casual worked on a regular and systematic basis and had a reasonable expectation of ongoing work.
• Eligibility often depends on the minimum employment period (6 months for larger employers, 12 months for small business employers), plus other thresholds and coverage rules.
• Even for casual employees, you reduce risk by having a valid reason, following a fair process, and documenting key conversations and warnings.
• A well-drafted Employment Contract can help set expectations around shifts, conduct, and how the relationship may end.
• For performance issues, a structured warning-and-improvement process usually makes the biggest difference in defending unfair dismissal claims.
• For misconduct issues, consider investigation steps first - including whether a show cause letter process is appropriate, and get advice before attempting to stand down a casual employee (as stand down must be legally authorised).

If you’d like help managing casual employee unfair dismissal risk (or you’re planning to end a casual engagement and want to do it properly), you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.