Aitken Legal Senior Associate Nikolina Palasrinne wraps up her 3 part series on the current hot topic in employment law: The latest employment law changes and what you need to know about engaging casuals in schools.
In previous editions of School Law News, we have looked at the new casual conversion obligations under the Modern Awards that apply to schools. We have also looked at recent cases that deal with the question of whether someone is truly a casual at law, and what this means for schools. If you missed either of these publications, you can check them out Part 1 here and Part 2 here
Below is Part 3, where we look at the legal risks associated with calling someone a casual when they are really a permanent employee. We will also outline some practical strategies on how you can proactively deal with the recent changes in the law to make sure you meet your employment law obligations.
What are the legal risks if your casual is not really a casual?
Section 44 of the Fair Work Act 2009 (the Act) states that an employer must not contravene a provision of the National Employment Standards (NES). Section 44 is a civil remedy provision meaning that if a casual employee pursues a claim alleging that they are in reality a permanent employee and they win, then in addition to any compensation they may receive (i.e. for non-payment of permanent employee entitlements), an employer can be penalised up to $63,000.00 per breach of the Act. That is, up to $63,000.00 for or each occasion that an NES entitlement is found to be owing to the employee. This could include for instance, annual leave, personal/carer’s leave, public holidays, parental leave, redundancy and notice pay or any other NES entitlement.
Importantly, any person knowingly involved in a contravention can also be found to be personally liable and penalised up to $12,600.00 per contravention. For example, if a Manager has knowledge or was involved in the employer’s breaches of the Act, personal liability can be imposed. The consequences of calling someone a casual when they are not are therefore clearly significant.
In assessing whether an employee is a casual or a permanent employee, the Courts will look beyond the naming of an employee as a casual. The mere fact that an employee received a casual loading or was engaged and paid by the hour, will not be enough to avoid liability.
Schools should also be aware that word travels quickly. If one employee brings a claim alleging that they are a permanent employee and they are successful, that could set a precedent for other so-called casual employees and thereby open the flood gates to litigation, costs and substantial underpayment claims. Note also that an employee can claim outstanding wages and entitlements dating back 6 years from the date that the proceedings were commenced.
Practical strategies to reduce your risk
In managing casual employees, employers should:
- Review and update current engagement models to ensure compliance with the Act;
- Review and update employment contracts to ensure that the terms of the engagement are clear, including what and how the casual employee will be paid (and make sure that the casual loading is specifically identified and offset against permanent employee entitlements);
- Review and update timesheets to ensure that hours of work are properly recorded;
- Review and update payslips to ensure that payment of any casual loading is specifically and separately identifiable to the base rate of pay;
- Closely monitor the hours worked by casual employees and ensure that overtime entitlements are paid where applicable;
- Develop adequate systems that assist in identifying regular and systematic casual employees and/or patterns of work;
- Implement reminder notifications to ensure casual conversion notices are issued to employees within the required timeframe (and keep records documenting that they have been provided);
- Consider a proactive approach of offering permanent employment to ‘high risk’ employees to prevent a Skene Decision scenario (refer to our previous publication for a summary on the Skene Decision here
- Establish processes for managing any requests for casual conversion;
- If converting to permanent employment, issue a new part-time or full-time contract of employment to record the change – and specify in the contract the point in time where the relationship changed from casual to permanent;
- If you make an offer of conversion to permanent employment and the casual employee rejects the offer because the employee prefers to remain casual, make sure you have an appropriate rejection document on file – and seek advice on the preparation of that document because it will be critical if a claim is ever made; and
- Consider whether a further Fair Work Information Statement needs to be supplied on conversion, given the extended NES benefits that permanent staff have.
With casual employment currently in the legal and political limelight, schools should be proactive and seek employment law advice on the unique risk factors that exist in their workplace. Prevention is always better than cure!
Nikolina Palasrinne is a Senior Associate at Aitken Legal, a boutique firm specialising in employment law for employers. She has been practising in the area of employment law since 2011. She previously worked as a Senior Associate at Adams Wilson Lawyers, where she represented both employers and employees. This experience has provided her with a holistic understanding of the complex world of employment law and the vital steps that employers must take to ensure adequate protection for their business. She has advised individuals, corporations, associations and non-for-profit organisations on all thing’s employment law throughout Australia. Nikolina frequently presents to school administrators, school counsellors and teachers on relevant employment law obligations. Contact Nikolina at email@example.com or connect via LinkedIn . You can also connect with Aitken Legal via LinkedIn .