Types of Employment - Getting it Right
This blog will focus on the different employment types of individuals who are employees under the law.
It is important to clearly define the employment type of each and every employee that the business employs, as different employment types attract different entitlements.
Although the applicable Modern Award will set out the specific rules for categorising full-time, part-time and casual employees in a particular industry (refer to Part 3 of the Modern Award that applies to your business), this article will provide you with general guidance and clarify 'workplace myths' that sometimes arise.
Full-time Employees
A full time employee is a person who is generally employed to work at least thirty-eight (38) hours each week. If an employee works more than thirty eight hours in a week, then usually the employee is entitled to be paid at overtime rates, or to receive paid time off in lieu of overtime payment.
An employer is required to either guarantee a full-time employee with at least thirty-eight (38) hours of work each week, or if this is not possible, the employer will still generally need to pay a full-time employee for thirty-eight (38) hours of work.
Full-time employees are entitled to the following types of leave each year:
- Four (4) weeks of paid annual leave
- Ten (10) days of paid personal / carer's leave
- Two (2) days of paid compassionate leave for each permissible occasion
- Two (2) days of unpaid carer's leave
- Community Service Leave (i.e jury duty)
- Payment for not working on a Public Holiday
Part-time Employees
A part time employee is a person who is employed to work less than thirty-eight (38) hours each week on a reasonably predictable basis. There is usually a minimum number of hour per shift that an employer can require a part-time employee to work (generally, it is either a minimum of 3 or 4 hours).
Some Modern Awards require an employer to enter into a written agreement with a part-time employee, specifying the following:
- the agreed hours to be worked each week, and each day
- which days of the week the employee will work
- the actual starting and finishing time each day
Generally, a change in the hours of work for a part-time employee can only be made by written agreement between the employer and the employee, and changes in the days of work can be made by the employer giving the employee certain notice.
Any hours worked in excess of the agreed daily or weekly hours are generally to be paid at overtime rates (or paid time off in lieu of overtime payment).
Note that there is no such thing as a 'casual part-time employee', as part-time employment is always 'permanent' in nature.
Part-time employees are entitled to the following types of leave each year:
- Four (4) weeks of paid annual leave on a pro-rata basis
- Ten (10) days of paid personal / carer's leave on a pro-rata basis
- Two (2) days of paid compassionate leave for each permissible occasion
- Two (2) days of unpaid carer's leave
- Community Service Leave (i.e jury duty)
- Payment for not working on a Public Holiday (only if the employee normally works on the day that the Public Holiday falls on)
Casual Employees
A casual employee is generally a person who is 'engaged to work as such', for a minimum number of hours per shift (generally, it is either a minimum of 3 or 4 hours). Although Modern Awards do not generally define what a casual employee is, traditionally casual employees work different hours each week, on different days each week, and at different times (although it is possible to have a casual employee working the same hours each week, on the same days and at the same times, depending on the Modern Award that applies).
Some Modern Awards have refer to a 'regular casual employee', which is a casual employee who works on a regular and systematic basis. After six (6) months of working as a regular casual employee, these types of employees have the option of converting to either full-time or part-time employment.
Casual employees are paid an additional 'casual loading', and are therefore not entitled to the same paid leave that other employees are entitled to. Depending on the Modern Award that applies, casual employee may be entitled to penalty / overtime rates for working in excess of a certain number of hours each day or week.
Casual employees are only entitled to two (2) days of unpaid carer's leave.
All Employees
All employees are entitled to unpaid parental leave, as well as long service leave (depending on the state / territory long service leave laws).
Summary
As you can see, different types of employment are subject to different rules and entitlements. In our experiences, we have seen:
- casual employees working 38 hours every week (in contravention of a particular Modern Award), receiving a casual loading, and later claiming annual leave in addition to the casual loading;
- full-time employees who have their hours reduced to 30 hours each week, and are only paid for 30 hours, without their consent. Such employees have been able to claim the difference between their actual pay, and the pay they would have received if they had worked full-time hours.
Employers should first establish which of the above three employment types they intend to classify an employee, and then have a written employment agreement that clearly indicates what that employment type is.
Generally, any change to this employment type needs to be agreed to by the employee, and the change should also be documented.
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