Terminating a Casual Employee: Advice for Australian Employers

Author: Megan Adams, Progressive Legal

As an employer, we’re sure you use casual employees from time to time in your business. Sometimes terminating a casual employee becomes a decision you have to make.

On this page, we’ll cover everything you need to know about casual employees, best practices for terminating a casual employee, and the main areas of risk for an employer when terminating a casual employee.

What is a casual employee?

Casual employees are employed on an irregular basis. A decent employment contract will tell casual employees that their employment agreement is terminated at the end of each shift and they are re-hired at the beginning of the next shift.  

For an employee to be a casual employee, the contract must state that the employee is engaged casually. The employee is also paid casual loading on top of their base hourly rate. This loading includes payment for entitlements they would otherwise receive (i.e. leave loading and public holidays). 

The hallmark of casual employee engagement is that the casual employee is not guaranteed ongoing work.  

The Fair Work Act (2009) Cth (“the Act”) states that casual employees do not have a statutory notice period. This means that an employer or a casual employee can terminate the employment agreement on the spot. However, you should always check an employee’s contract or the award that covers the employee to see if either of those documents provides for a notice period. 

What are the best practices for terminating a casual employee?

If you need to terminate a casual employee, it is best practice to show that you have followed principles of procedural fairness.

For instance, if there is a problem with the employees performance then you need to show that you have addressed this with the employee and given them an opportunity to improve. If you have a problem with specific conduct of the employee, you should be able to show that you gave them an opportunity to answer allegations put to them. 

It is best practice to record the termination in writing, as you may need to produce the records under the Act. If you need guidance in terms of producing these records, please enquire below to speak with our professional team.

Conducting termination meetings

Conducting a formal termination meeting ensures clarity, maintains professionalism and helps mitigate risks by following principles of procedural fairness. Here are some key point to consider when it comes to a termination meeting.

• Provide the employee with sufficient notice of the meeting. Although casual employees can be terminated on the spot, giving notice helps maintain fairness.
• It’s advisable to have a third party present during the termination meeting to serve as a witness. This can help prevent potential disputes about what was said during the meeting.
• Clearly explain the reasons for the termination. Whether it’s due to performance issues, conduct, or a reduction in available work, transparency is key.
• Allow the employee to respond to the reasons given for their termination. This ensures they feel heard and can provide any additional context or information.
• If appropriate, provide information about final pay, any outstanding entitlements, and available support services. Offering guidance can help the employee transition smoothly out of the role.

What are the main areas of risk when terminating a casual employee? 

One thing that employers need to be cautious of, if they regularly engage a casual employee, is that the employee may accrue permanent employment entitlements. This can happen if, for instance, you have casual employee who regularly works regular shifts for 6 months (or 12 months if you are a small employer).

In such a circumstance, the employee may be able to say that they had a reasonable expectation of ongoing work and therefore accrued entitlements.

Risk of unfair dismissal claims 

While casual employees cannot typically claim unfair dismissal remedies, a casual employee who has worked regularly in these circumstances would be able to pursue unfair dismissal remedies.

This risk arises because the employee may argue that they had a reasonable expectation of ongoing work, which aligns more closely with permanent employment. If the Fair Work Commission agrees, the employee could be entitled to protections typically afforded to permanent employees, including the right to claim unfair dismissal.

To mitigate this risk, employers should clearly define the casual nature of the employment in the contract and avoid scheduling casual employees in a pattern that resembles regular and systematic work. You should also maintain records of the casual engagement and any communications that affirm the casual status of the employment.

Risk of general protections claims

Casual employees are all entitled to general protections coverage. This means that an employee cannot be terminated for exercising their workplace rights, such as making a complaint about their employment conditions or taking personal leave. If a casual employee believes they were terminated for such reasons, they can lodge a claim for general protections.

General protections claims can arise from various scenarios, including:

• Retaliation for raising safety concerns.
• Termination due to taking or requesting personal leave.
• Adverse actions taken because the employee exercised any of their workplace rights.

To protect against general protections claims, employers should ensure all termination reasons are lawful and well-documented. You should also avoid taking adverse actions against employees for exercising their rights and provide thorough training to management on compliance with workplace laws and rights.

Key takeaways: some advice from our team

It is best practice to go through the standard termination of employment steps with a casual employee that you would go through any other employee for instance: 

• offering a support person;  
• giving the employee at least 24 hours notice (although may not always be practical);  
• giving the giving the employee an opportunity to respond if it is a disciplinary matter; and 
• keeping records of the steps you took to preserve procedural fairness. 

Terminating casual employees can be more difficult than many employers anticipate. Reach out to us if you require any advice in relation to terminating casual employees. Make an enquiry below or contact our office at 1800 820 083 to speak to our experienced employment lawyers.

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