Casual or Permanent Employment?

Posted by on Nov 19, 2014 in Blog

Casual or Permanent Employment?

According to data released in May by the Australian Bureau of Statistics, about 19% of the Australian workforce, or 2.2 million individuals, are considered casual workers. These individuals are regularly hired by employers to work on a week to week or day to day basis.

There are both benefits and disadvantages to casual employment. Casual workers generally earn at least a 20% higher hourly rate of pay than permanent employees, but these workers also do not earn traditional employee benefits such as sick time and holiday pay. Since there is no guarantee of continued employment, a casual employee can legally refuse a work assignment at any time. Many casual workers, such as college students and restaurant workers enjoy the freedom and flexibility in scheduling and pay that this arrangement provides.

Other casual employees feel that they are not adequately compensated for the lack of stability in their employment. This is especially true for some casual workers such as receptionists, teachers, and healthcare aides that work with the aged and disabled. In addition to a lack of stability, casual workers also have limited rights and protections. Currently, they can only access protection offered by unfair dismissal laws when they have worked at a specific business for 6 to12 months, depending on the employer’s size.

Regardless of how one may personally feel about the advantages and pitfalls surrounding casual employment, this option may soon be coming to an end.

The Australian Council of Trade Unions has a proposal before the Fair Work Commission to reform the modern award system. In this proposal, casual workers will gain access to traditional permanent employee benefits such as training, holiday and sick time, and promotions, but may lose some of their flexibility when it comes to scheduling and rate of pay. Currently, it is believed that businesses will feel the most change should the proposal be adopted.

While it remains to be seen if the proposal will be successful, it is probably prudent for Australian businesses to take a careful look at how much they rely on casual workers and begin to plan for potential changes in the modern award system. This is especially true for small and medium sized businesses that often work on smaller margins and thus have fewer options to absorb the cost that such changes could bring to their business.