Terminating casual employees: a euphemism-free zone

Over the last few years casual employment has received significant attention, first because of two major court cases which challenged the notion of what it means to be a casual, and then because of Parliament’s efforts to mitigate the effect of these court cases on the status quo.

These court cases, and indeed the legislation, emphasise that in order to be a casual employee, the employee must not have been promised ongoing work, and the employer is free to offer or not offer work at their discretion according to their need. Conversely, the employee is free to accept or reject work offered according to their convenience.

With this in mind, the question of when a casual’s employment is terminated might seem to be relatively straightforward, however recent decisions from the Fair Work Commission (FWC) have emphasized that it is anything but.

“No shifts available” insufficient to terminate casual employment

In Castro v Espresso Warriors [2021] FWC 2527, the FWC had to consider whether an employer had dismissed a casual employee when they advised the employee that “there are no more shifts”.

Before the FWC, the employer’s evidence was that “I just said we are unable to give you any shifts. As (the employee) was a casual worker, I thought that was a good enough thing to say.”

Commissioner Johns, finding in favour of the employee, held that it was not “good enough”, finding that “In any given week a casual employee may not have shifts allocated to them. It does not lead to the conclusion that their employment has been terminated.”

Termination must be clear an unequivocal

The law has long required that employment can only come to an end by the clear and unequivocal words or conduct of either the employee (by expressly resigning) or the employer (by expressly dismissing the employee).

Citing a long line of High Court authority, the Full Bench of FWC held in Ayub v NSW Trains [2016] FWCFB 5500 that in order to terminate an employment contract “an employer must … communicate to the employee by plain or unambiguous words or conduct that the contract is terminated.”

In Castro, Commissioner Johns reached his conclusion along the same reasoning holding that, in the case of casual employment, advising that there is no work available is effectively little more than a statement of current circumstances and does not go far enough to tell the employee that they will never be offered work again.

“Termination by effluxion”

Although the need to actively communicate termination to casual employees has long been a staple of casual employment, it is a matter that tends to fall by the wayside, particularly when a casual employee has not performed work for an extended period.

It is not uncommon for employers with significant cohorts of casual employees to discreetly remove a casual employee from the payroll system when the employee has not performed work for a certain period, usually several months.

Since a dismissal does not take effect until it is communicated to the employee, the risks of such an approach are obvious – the employee is not “dismissed” when they are removed from the payroll or rostering system, but when they are told that this has occurred, which may be quite some time in the future.

In Bravo-Crowe v Anton Wiesman Shachaya Group Pty Ltd [2020] FWC 3183, Deputy President Barclay determined that the failure to roster a casual employee, or removing a casual employee from the roster, did nothing more than speak to the particular roster period. It did not, in itself, communicate anything about the ongoing employment relationship.

Although the risk of a casual employee who has been removed from the payroll or rostering system in this way making a claim against their employer may be relatively low, employers should be mindful that such an employee has, in legal terms, never been dismissed.

Should the employee later return requesting work, the employer would be in the awkward position of having to advise the employee of their termination, which would start the 21-day time period for contesting the dismissal at that time.

Alternatively, whether they are advised of their dismissal or not, a casual employee who has not been rostered despite being available to work can claim “constructive dismissal” at a time substantially of their choosing.

Drawing a line under the employment relationship

In the vast majority of cases, the risk of a claim is better managed by taking the positive step of advising the casual employee of their dismissal, drawing a line under the employment relationship.

Although there can be an attraction to “dismissing” a casual employee either through euphemisms or discreet means, these processes are not without their risks, and risks can come back to roost at any time.

For a confidential discussion about your rights and obligations in managing your employees, including dismissal processes, contact NRA Legal on 1800 572 679.

By Alex Millman and Lindsay Carroll, NRA Legal