Best Practices for Terminating Casual Employees: Legal Compliance and Respectful Treatment

Posted On

June 28, 2023

Posted By

Kylie Thomas

Terminating a casual employee is a sensitive topic that HR professionals and managers would prefer to avoid unless absolutely necessary. However, in the course of running a business, there may arise situations where termination becomes inevitable. Whether it’s due to misconduct, poor performance, or challenging financial circumstances, it is crucial to navigate the process with utmost care and respect, ensuring compliance with legal obligations. In this article, we will delve into the appropriate way to terminate a casual employee while providing insights into identifying casual employment status and mitigating risks associated with unfair dismissal and general protections claims.

Understanding Casual Employment

In recent times, there has been increased scrutiny on how employers engage employees, leading to legislative amendments such as the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 (Cth). These changes aim to redefine the engagement of long-term casual employees and gig workers, emphasising the need for employers to carefully assess their workforce requirements and employment arrangements. As an employer, it is vital to understand the criteria that define a casual employee to comply with the Fair Work Act and avoid penalties.

Casual employees are individuals who accept employment offers without a firm commitment to ongoing work or an agreed pattern of work. They typically work irregular hours, with shifts varying from week to week based on the employer’s needs. It’s worth noting that recent casual conversion laws require employers to offer eligible casual employees who have been employed for more than 12 months the opportunity to convert to full-time or part-time permanent employment, subject to specific eligibility criteria.

Risks of Unfair Dismissal

Unfair dismissal occurs when an employee is terminated in a harsh, unjust, or unreasonable manner. It is important to understand that casual employees have limited access to unfair dismissal claims unless they meet certain criteria. To be eligible, a casual employee must have worked regularly and systematically, had a reasonable expectation of continued employment, and worked for more than 6 months (non-small business employer) or 12 months (small business employer). If a casual employee satisfies these criteria, they may lodge a claim for unfair dismissal, and the outcome will depend on the facts and circumstances of the case.

Mitigating General Protections Claims

Even if a worker is classified as a casual employee, they still have rights and protections under the Fair Work Act. General protections claims extend to all employees, including casuals, and cover situations where workplace rights are affected by harmful actions, coercion, undue influence, or misrepresentation. A casual employee may file a general protections claim if they believe their employer has taken adverse action against them for exercising or proposing to exercise a workplace right. It’s crucial for employers to be aware of these protections and ensure compliance with the law.

Considerations Before Termination

Before proceeding with the termination of a casual employee, it is essential to consider the following factors:

  1. Valid Reason for Termination: Ensure that there is a valid and lawful reason for terminating the employee. This reason should be related to the employee’s performance or conduct and should not be deemed harsh, unjust, or unreasonable.
  2. Procedural Fairness: Follow a procedurally fair disciplinary process by notifying the employee of the reason for termination and providing them with an opportunity to respond. Granting the employee the option to bring a support person to the meetings is advisable.
  3. Notice Period and Redundancy: Casual employees, as defined by the Fair Work Ombudsman, are generally not entitled to a notice period or payment in lieu of notice. However, it is crucial to verify the employment contract and applicable industrial instrument (modern award) to determine specific obligations regarding notice periods. Redundancy considerations may apply if the casual label has been misapplied, and the employee qualifies as a permanent full-time or part-time employee.

Termination Meeting Essentials

When preparing for the termination meeting with a casual employee, keep the following key points in mind:

  1. Offer Support Person: While it is not a legal requirement, offering a support person to be present at the termination meeting can be beneficial. This demonstrates fairness and may work in your favour if the matter is brought before the Fair Work Commission.
  2. Provide Adequate Notice: Provide the employee with 24 hours notice of the meeting and ensure they receive adequate information about the purpose and nature of the meeting. This allows them to prepare themselves and, if desired, find a support person to accompany them.
  3. Manager’s Role: Empower the employee’s direct manager to deliver the termination news with empathy and professionalism. Highlight specific examples of previous attempts made to address the issues, such as performance improvement plans, training, or formal warnings. Document these details in the termination letter for a comprehensive record.
  4. Clarity and Sensitivity: Communicate the decision to terminate the employee clearly and concisely. While it is important to explain the reasons behind the decision, excessive details may not be necessary unless the situation calls for it. Treat the employee with respect and empathy throughout the process.

Conclusion

Terminating a casual employee is a challenging and often uncomfortable process. Regardless of employment status, it is crucial to treat employees with respect, dignity, and fairness when terminating their employment. By understanding the legal obligations surrounding casual employment, mitigating risks of unfair dismissal and general protections claims, and following proper procedures during the termination process, employers can protect their business and maintain a positive reputation in the long term. Taking a fair and kind approach to terminations fosters a healthy workplace culture and upholds the principles of good employment practices.

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