Casual employees and avoiding unfair dismissal claims

Casual workers can be covered by unfair dismissal laws under the Fair Work Act, if they are long-term casual workers who have an expectation of continued employment. The casual worker in question must have worked in the role for at least 6 months or more, be able to show they work regular shifts, that they work on a regular and systematic basis, and reasonably expect to work the same shifts each week.

Business practices to follow to avoid an unfair dismissal claim:

Firstly, create a written policies and procedures manual that clearly communicates your business policies and guiding principles concerning termination of employment. Include the course of action relating to termination, period of notice, and behaviour that would constitute a serious breach of the employment contract and lead to termination. State any unusual or special rules, procedures  or practices that apply at your workplace to avoid unnecessary problems.

When hiring, include a probationary period in the employment contract. This can be for up to six months, or 12 months if you are an employer with fewer than 15 employees. This allows your business, and the new employee, to assess each other and make certain the working relationship will be constructive and beneficial. There is no penalty if you wish to terminate the employment contract during the probationary period, and no possibility of an unfair dismissal claim provided the probationary period is clearly set out.

Ensure managers know whether they have the power to hire, discipline and fire others or not, and the circumstances under which they may administer employees with formal disciplinary  warnings, and exactly how this must be done. Management training will benefit your business productivity, and foster healthy relationships between supervisors and casual employees. Even-handedness between managers is necessary for your business to demonstrate it is serious about equal implementation of policies between employees. Make sure your casual employees understand who they are to take orders from and answerable to, and the authority relating to their employment that person holds.

It is essential that your business is in the practice of giving fair warnings and undertaking procedural fairness prior to termination. Have regular meetings with employees and keep a diary of resolved and unresolved problems, questions, exchanges and promises made along with relevant timeframes for the requested improvements. If there are issues with an employee, issue  warning letters and keep copies, and try counselling and guidance, or extra training to improve performance. Keep a written record of your steps taken here, as you must make genuine attempts to assist the employee to improve the employee’s performance and the problems outlined in the letters. Issuing  two warning letters then a final warning letter is usual practice before the letter of dismissal. (If the employee has committed gross or serious misconduct warnings are not necessary, and they may be fired on the spot without risk of unfair dismissal.)

Hold a formal dismissal interview, and give the employee a chance to respond to the dismissal. Put your reasons for dismissal forward and then ensure you give the employee the opportunity to give their side of things. The onus is on you as the employer to conduct reasonable investigation into what went wrong, and why. Conducting an exit interview can be helpful to your business, you may learn that aspects of your company, systems or processes, supervisors or management are not functioning as well as they could be and that you may need to review and /or provide extra support or resources to optimise business performance.

Reasons and procedures for firing an employee that are considered fair:

Dissatisfaction in terms of an employee’s capacity or conduct or the operational requirements of the business are fair reasons to terminate someone’s employment. Other fair reasons to terminate employment also (generally) include:

  • Poor performance;
  • Misconduct;
  • Dangerous behaviour;
  • Refusing to follow instructions; or
  • No further need for the position (retrenchment or redundancy).

Unjustifiable grounds for dismissal include:

  • Race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin;
  • Engaging in lawful industrial activity, such as belonging to or participating in union activities; and
  • Temporary absence from work because of personal illness or injury.

Also, make sure you do not sack someone for doing something your business has previously encouraged or endorsed, and provide a safe workplace as required under Workplace Health and Safety laws. If employee then fails to comply with safety rules, it will constitute a serious breach of company policy, and justification for disciplinary action.

Changing an employee’s job description may be viewed as a constructive termination. Although there are clauses that allow employers to alter job descriptions, it is never something that can be put in a contract, and you must seek to fairly renegotiate the terms of contract with an employee if you are significantly changing their role, hours or pay – even for casual workers.

Complete a fair termination successfully and ensure that you present the proper final wages payment to the employee (accumulated annual leave will not be applicable for casual employees). You must be sure to pay them all outstanding wages for hours they have worked, including penalty rates and allowances, together with any pay in lieu of notice, if applicable.

This is general advice only. Liability limited by a scheme approved under Professional Standards Legislation. 

Published Jul 10, 2017

Clifton Hill Jessica Kerr Sinclair + May

Jessica Kerr is the Director of Sinclair + May, a female-led, boutique commercial law firm based in Melbourne’s inner north.  Sinclair + May work with small businesses to ensure their legals are in order. Book a free 15-min chat here to talk with one of our solicitors.

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