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As a small business owner, it is important you understand the differences between employee status. We often hear from employers who are confused about the differences between casual and part-time employees.
Casual and part-time employees differ in a range of areas including work hours, leave, pay, public holiday payments and notice periods.
When hiring an employee it is important you understand what employee status is best for the role you want them to play in your business.
Let us break down the differences for you!
Part-Time Employees
A part-time employee is usually regarded as a permanent employee or on a fixed term contract. The same benefits generally apply to both full-time and part-time employees, with certain entitlements on a pro rata basis for part-time employees.
Part-time workers typically work less than 38 hours per week, have regular and predictable working hours and are entitled to paid leave.
Part-time work is generally regarded to be pretty stable, clearly defined and encompasses the benefits of paid leave such as sick leave, annual leave and carers leave.
Notice periods for part-time workers are usually set out in a modern award or in their Employment Agreement.
If an employer wishes to terminate a part-time employee’s employment, the employee is usually entitled to written notice or payment instead of notice.
Casual Employees
When thinking of what it means to be a casual employee, think: ad hoc work with irregular and unpredictable hours.
Casual employees generally have no firm commitment to their employer and are not obliged to commit to all work proposed by their employer.
Casual employment roles can incorporate irregular hours and are not guaranteed to be ongoing. However, different entitlements apply to ‘long term casuals’ who have worked for more than a year on a regular basis. Long term casuals can also be entitled to parental leave and can request flexible working arrangements.
If a casual worker wishes to end their employment, they can usually do this without notice. This is unless notice is required by a registered agreement, award or employment contract.
Casual workers are entitled to:
- ‘Casual loading’ (this is a higher rate than part-time and full-time workers receive, because casual workers don’t get benefits such as sick leave or annual leave)
- 2 days’ unpaid carer’s leave
- 2 days’ unpaid compassionate leave per occasion
- 5 days’ unpaid family and domestic violence leave (in a 12-month period)
- Unpaid community service leave
A recent court ruling has determined that some casual workers may be entitled to leave payments. More on this below.
So, What Are The Differences Between Casual And Part-Time Employees?
Let’s break the key differences between casual and part-time employees.
- Work Hours
| Part-Time Employees | Casual Employees |
| Have guaranteed hours of work On average, work less than 38 hours per week | No guaranteed work hours Work hours are generally irregular and unpredictable |
- Leave
| Part-Time Employees | Casual Employees |
| Entitled to paid leave Leave entitlements include annual leave, sick leave and carers leave | No paid leave entitlements |
- Pay
| Part-Time Employees | Casual Employees |
| Usually pay is based on an annual salary as outlined by modern award or Employment Agreement | Usually pay is based on an hourly ‘Rate of Pay’ with casual loading |
- Public Holiday Payments
| Part-Time Employees | Casual Employees |
| Must be paid public holiday payments if their usual working day falls on the public holiday If the public holiday falls on a day that the employee does not usually work, they are not entitled to public holiday pay | No public holiday payments |
- Notice Period
| Part-Time Employees | Casual Employees |
| Notice period is typically set out in a modern award or employee agreement Entitled to written notice or payment if their employer wishes to terminate their employment | No notice period is required This is unless a notice period is set out in an employee agreement or award |
- Superannuation
No differences here!
Both casual and part-time employees are entitled to 9.5% of the value of their ‘ordinary time earnings’ (this includes shift loadings, but not overtime payments).
The Ruling In Workpac v Rossato
In the recent case of Workpac v Rossato, it was held that if a casual employee works regular and systematic hours with ‘predictable periods of working time,’ they are entitled to:
- Personal leave
- Compassionate leave
- Public holiday payments
The case suggested that ‘casual’ workers who work regular and systematic hours will be awarded with the security and entitlements that come with permanent work.
The case is currently being appealed to the High Court of Australia and, as such, this means businesses probably won’t gain certainty any time soon as to whether this decision will be upheld.
Until the High Court of Australia reviews Workpac’s application, the information about casual workers’ entitlements on Fair Work Australia’s website remains correct.
Conclusion
Knowing the differences between casual employees and part-time employees can help you optimise the functioning of your business.
But determining the status of an employee can sometimes be tricky.
It is important that you understand the role you want your employee to play in your business and what employee status coincides with that role.
We’re here to help! Reach out to our team for a free, no-obligations chat at team@sprintlaw.com.au or 1800 730 617.
Get in touch now!
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