Unfair Dismissal And Casual Employees In Australia

Managing a casual workforce gives you flexibility. But it also comes with legal responsibilities - especially when you’re ending someone’s engagement.

One of the most common questions we hear from employers is: can a casual employee claim unfair dismissal? The short answer is “sometimes”. Whether a casual worker can bring an unfair dismissal claim depends on how they were engaged, how long they’ve worked with you, and the steps you took when ending the relationship.

In this guide, we’ll unpack the rules around unfair dismissal and casuals in Australia, what counts as a “regular and systematic” casual engagement, and practical steps to reduce risk if you need to let a casual go. We’ll also cover good process, documents to have in place, and common pitfalls small businesses should avoid.

Can A Casual Employee Claim Unfair Dismissal?

Casuals don’t automatically have access to unfair dismissal. However, a casual employee may be eligible to claim if they meet certain criteria under the Fair Work Act 2009 (Cth).

To bring an unfair dismissal claim, a casual must generally show that:

• They were employed on a regular and systematic basis; and
• They had a reasonable expectation of continuing employment; and
• They have completed the minimum employment period; and
• Your business met the jurisdictional coverage (e.g. a national system employer); and
• The dismissal was “harsh, unjust or unreasonable”.

Minimum employment period: for non-small businesses (15+ employees), the minimum period is at least 6 months’ service. For small businesses (fewer than 15 employees), it’s at least 12 months.

Importantly, only service as a regular and systematic casual counts toward that minimum period. Ad-hoc or irregular shifts typically won’t count. The Fair Work Commission (FWC) looks at the real pattern of work - not just what the contract says - including rostering, frequency of shifts, and whether there was an ongoing expectation of work.

Small Business Fair Dismissal Code: if you’re a small business, complying with the Small Business Fair Dismissal Code can be a strong defence to an unfair dismissal claim. It doesn’t guarantee success, but it helps show you acted reasonably and followed a fair process.

What Does “Regular And Systematic” Mean For Casuals?

This phrase is key. A casual may still be a casual at law, but if their work routine looks consistent and predictable over time, they may be seen as “regular and systematic”. Some indicators include:

• Recurring shift patterns (e.g. every Friday/Saturday night for months)
• Advance rosters issued on a rolling basis
• Ongoing reliance on the worker to fill specific roles or times
• Communications that signal ongoing engagement (e.g. “see you next week”)

“Reasonable expectation” is assessed objectively. If your communications, rosters, and conduct suggest the person would continue getting shifts, they may meet this requirement even without guaranteed hours.

Tip: ensure your Employment Contract clearly describes the casual relationship and avoids promising guaranteed hours. Then, back that up operationally by managing rosters and communications carefully.

Lawful Reasons For Ending A Casual Engagement (And How To Do It Fairly)

Even if a casual is not eligible for unfair dismissal, you still need to act lawfully. Termination decisions must not be discriminatory, retaliatory, or in breach of workplace rights. And if the casual is eligible to bring an unfair dismissal claim, process becomes even more important.

Identify A Valid Reason

The FWC will look for a valid reason related to the employee’s capacity (e.g. not meeting inherent requirements) or conduct (e.g. repeated lateness, performance issues, misconduct). Document the issues as they arise. Keep records of missed shifts, customer complaints, or performance shortfalls.

Follow A Fair Process

Procedural fairness matters. A simple, fair process for a casual might include:

• Raising concerns early and providing clear feedback
• Giving the employee a chance to respond
• Offering reasonable support (e.g. a support person for formal meetings)
• Setting expectations and timelines for improvement where appropriate
• Issuing a written warning for performance or conduct concerns if warranted

Where serious allegations arise (e.g. bullying, theft, safety breaches), consider an investigation. In some cases, you may need to remove the employee from the workplace temporarily while you investigate - read more about standing down an employee pending investigation and ensure any step you take is permitted by the contract or applicable instrument.

When concerns are significant, a show cause letter is a practical tool. It sets out the allegations, evidence, and asks the employee to explain why their employment shouldn’t be terminated.

Consider Probation And Casual Conversion

Some casuals may begin during a probationary period, though probation does not override unfair dismissal laws if the person otherwise qualifies. If you’re ending a casual engagement during a trial period for an ongoing role, align your approach with your policy and contract terms. Our guide on termination of employment during probation explains what to consider.

Also factor in casual conversion obligations (the right for eligible casuals to convert to permanent employment). If a casual has asked for conversion or clearly meets the criteria, ending their engagement for that reason could risk a general protections claim.

Notice And Final Pay For Casuals

Generally, casuals are not entitled to paid notice of termination because the casual loading compensates for this. However, your applicable award, enterprise agreement or contract might set expectations around communication or minimum engagement periods for rostered shifts.

Pay all outstanding amounts promptly, including hours worked, overtime (if applicable), and penalty rates. Casuals don’t accrue annual leave or paid personal leave, but check long service leave rules (which vary by state/territory) and any other entitlements that might apply. If you are ending employment immediately for operational reasons, consider whether payment in lieu of notice is relevant for any non-casual staff affected at the same time.

Common Risks Small Businesses Face With Casual Dismissals

Ending a casual engagement can feel straightforward - fewer guaranteed hours and flexibility. But some risks regularly trip up employers. Being proactive can save you cost and time later.

Assuming “Casual” Means No Risk

If a casual works regular and systematic hours and expects ongoing work, they may qualify to claim unfair dismissal. The FWC will look beyond labels and consider the real working relationship.

Skipping Process Because Shifts Are “Casual”

Even for casuals, it’s good practice to warn, listen, and document. This helps defend any claim of unfairness and ensures employees understand concerns and expectations.

Adverse Action And Discrimination

It’s unlawful to take adverse action because someone exercised a workplace right (e.g. queried pay, took sick leave) or due to protected attributes (e.g. race, sex, age, disability). These “general protections” claims are separate from unfair dismissal and can apply to casuals.

Rostering Out Versus Termination

Stopping shifts without a conversation can be risky if the pattern of work suggests ongoing employment. Be transparent. If you’re not offering further shifts due to performance or conduct, communicate that in writing and keep records of the reasons.

Confusing Redundancy With Casual Offboarding

True redundancies relate to roles no longer being required. Casuals typically don’t receive redundancy pay, but redundancies for permanent employees must be handled carefully, including consultation and selection processes. If you’re undertaking a restructure affecting both permanent and casual staff, consider getting redundancy advice to manage compliance end-to-end.

A Practical Step-By-Step Process For Ending A Casual Engagement

Every situation is different, but the following framework helps small businesses act consistently and fairly.

1. Check Coverage And Eligibility
   Confirm whether the person’s casual service is regular and systematic, whether they had a reasonable expectation of ongoing work, and whether the minimum employment period is met (6 or 12 months depending on business size).
2. Identify Your Reason
   Is this capability (can’t meet requirements), conduct (misconduct, lateness), or a genuine operational need? Document examples and any prior conversations or warnings.
3. Review Contracts And Instruments
   Read the Employment Contract and any applicable award or agreement. Check disciplinary procedures, minimum engagements, and any requirements before ending employment or ceasing shifts.
4. Communicate And Seek A Response
   Meet with the employee, outline concerns factually, and give them a chance to respond. For serious matters, send a show cause letter and allow a reasonable response period.
5. Investigate Where Needed
   For allegations that could justify summary dismissal (e.g. serious misconduct), run a fair investigation. Consider whether a temporary removal from the roster aligns with your rights and is appropriate in the circumstances, consistent with guidance on standing down pending investigation.
6. Decide And Confirm In Writing
   If you decide to end the engagement, issue a termination letter confirming the reason, effective date, and final pay details. Ensure it’s consistent with your evidence and the process you followed.
7. Process Final Pay Correctly
   Pay outstanding wages, allowances, overtime/penalties (if applicable) and ensure super is up to date. Casuals don’t get paid notice or annual leave on termination, but check long service leave laws and other applicable entitlements.
8. Keep Records
   Store notes of meetings, warnings, letters and calculation of final pay. Good records are invaluable if a dispute arises.

If your situation is complex or high-risk, consider using an employee termination documents suite and a structured performance management process to standardise your approach across the business.

How Unfair Dismissal Claims Work (And Timeframes)

If a casual is eligible, they generally have 21 days from the date of dismissal to file an unfair dismissal application with the FWC. After that, you’ll be asked to provide a response. Often, the FWC lists a conciliation conference where parties can try to resolve the matter.

Common outcomes include settlement (sometimes with a deed of release), withdrawal of the application, or in rare cases, reinstatement or compensation orders (capped and subject to limits). Your defence will focus on jurisdictional issues (e.g. regular and systematic service) and the merits (valid reason and fair process).

Having the right documents and a consistent process puts you in a stronger position from day one. If you’re unsure how to frame your response, speak with an employment lawyer early to map out strategy and identify evidence you’ll need.

Set Yourself Up To Avoid Casual Unfair Dismissal Disputes

The best defence is preparation. A few proactive steps can drastically reduce the risk of claims and the cost of disputes:

• Use tailored contracts: Make sure your Employment Contract clearly states the casual nature of the engagement, the absence of guaranteed hours, and how shifts are offered and accepted.
• Set clear expectations: Have simple policies on conduct, performance, availability, and rosters so everyone knows the rules.
• Manage performance early: Don’t wait for things to escalate. Give clear feedback, timelines, and document each step.
• Keep rosters consistent with the contract: If the business needs change, communicate early and avoid sending mixed messages about ongoing work.
• Address conversion requests properly: Respond to casual conversion requests as required. Keep written records of your decision and reasons.
• Standardise termination steps: Use templates for warnings, show cause letters, and termination letters so your process is consistent and fair.

Where you anticipate more serious issues (e.g. serious misconduct or reputational risk), build a plan that may include a fair investigation, temporary removal from shifts, and clear written communication. Processes grounded in fairness are usually the ones that stand up best if challenged.

What About Cancelling Shifts Or Stopping Rosters For Casuals?

In many cases, you can reduce or stop offering shifts to casuals without technically “dismissing” them. However, if the practical effect is that their employment has ended - especially where a casual has had regular and systematic work - the FWC may still treat it as a dismissal.

Before you scale back or stop rosters, consider:

• Have performance or conduct concerns been raised, with a chance to respond?
• Is there a business-driven reason (e.g. seasonal drop in demand) you can document?
• Have you checked any award/enterprise agreement limits around minimum engagements or cancellation rules?
• Are you communicating the change transparently and in writing?

Consistency, transparency and records are key. If you ultimately decide to end the engagement, confirm that in writing and process final pay promptly to avoid disputes.

Key Takeaways

• Casuals can claim unfair dismissal if they worked on a regular and systematic basis, reasonably expected ongoing work, and met the minimum service period.
• A fair process matters: identify a valid reason, raise issues early, allow a response, and document each step - especially for conduct and performance concerns.
• Casuals generally don’t receive paid notice or redundancy, but you must pay all outstanding wages and check any state long service leave rules.
• Avoid “rostering out” as a workaround. If the effect is termination, treat it as such and communicate clearly in writing.
• Strong foundations - a clear Employment Contract, simple policies, and standardised letters - reduce the risk of disputes and help you defend claims.
• For complex or high-risk exits, use a structured termination documents suite and get early advice from an employment lawyer.

If you’d like a consultation on managing unfair dismissal risks for casual employees, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.