Determining how to employ workers can be difficult. Should you employ staff on a permanent or casual basis? What works best for the employee and importantly, what works best for the employer?
To begin with, it is important to understand the key differences between permanent and casual employment arrangements, including the National Employment Standards (NES) that apply to full-time and part-time employees. While some NES entitlements are specific to permanent employees, certain standards and protections also apply to casual workers.
Permanent employees
Part-time employees are entitled to similar benefits as full-time employees, such as sick leave and annual leave, but on a pro-rata basis, as they work less than the full-time loading of 38 hours per week. Just like permanent full-time staff, part-time employees are entitled to termination notices and redundancy periods.
Advantages of employing permanent, part-time staff:
- The flexibility of a part-time role can be very appealing to prospective employees, and helps you recruit from a much wider recruitment pool
- Flexible hours are very attractive to the modern worker and can increase levels of staff retention
- Employing on a part-time basis can keep staff costs down
- Part-time employees tend to have higher morale, productivity and commitment than casual workers, as they’re official members of the team
Casual employees
Generally paid by the hour or by the day, casual employees don’t usually have regular or guaranteed hours of work. They don’t receive entitlements such as annual leave and personal leave but are paid more (called “casual loading”) to compensate for the lack of benefits and the general insecurity of their position. Under modern awards the casual loading is usually around 25%, however they may also receive a higher rate of pay for work on weekends or outside normal business hours.
Advantages of employing casual staff:
- Casual employment allows the employer to be very flexible, adjusting staff levels to match work flow
- The flexibility of a casual role can be very attractive to some employees
- The higher rate of pay can also be very attractive to employees
- There’s less risk of an unfair dismissal claim
- Employers don’t need to accrue leave entitlements such as annual leave, personal/carer’s leave
- Employers don’t need to provide casual employees with notice of termination or redundancy pay
- Employers are able to assess an individual’s suitability for a permanent position
On the downside, of course, casual workers have the potential to leave their employer in the lurch, declining a shift or simply resigning from work without notice. Employers must weigh up this risk against the advantages of employing a casual employee.
An employee can change from part-time to casual (or vice versa) at any time if the employer and employee both agree to it. New legislation also states that employers (other than small businesses) have to offer their casual employees an opportunity to convert to permanent (full time or part time) when the employee has met certain conditions.
Still not sure which is best? Talk it through with the HR Dept.