The part-time employment dilemma and why it’s the most inflexible category
By Zoe Brodie and Calum Woods, NRA Legal
What category you choose to employ someone under (full-time, part-time or casual) has more implications than simply a cost analysis of annual/sick leave or casual loading.
There’s more to think about than whether to trade job security for the ability to readily downsize your workforce, or the ability to set an annualised salary.
While the intricacies between permanent and casual employees have been well documented, less has been said about part-time and full-time employees.
In fact, under the General Retail Industry Award 2010 (Retail Award) and Fast Food Industry Award 2010 (Fast Food Award), apart from rates of pay, full-time and part-time employees share almost nothing in common.
Consider this example, and how you would deal with this situation in your business:
Sharron calls in sick the night before her rostered shift. You call in another employee, Jared, to take her shift. Jared is a part-time employee.
Would you pay Jared at his ordinary rate of pay for this shift? Could you swap this shift for one he would work later that week? Or should the additional shift be paid at overtime rates?
Confusingly, the answer could be all three.
Let’s start from the beginning
Jared is a part-time employee. He must have a written agreement with his employer when he first starts employment that specifies at least:
- which days of the week he will work, and start and finish times on each day;
- the total hours of work on each day; and
- the times and duration of any meal breaks.
It must also specifically state that this can only be varied in writing, and that the minimum daily engagement is three hours.
This step is absolutely not optional, and many of the issues that arise with part-time employees under the Retail and Fast Food Awards exist because an employer does not have (or does not stick to!) this written agreement with an employee.
What about having a range of hours instead? Can Jared’s contract say that he is guaranteed 20 hours per week rostered in accordance with his availability and the needs of the business?
While similar arrangements to this exist in the hospitality industry, under the Retail and Fast Food Awards, this approach is not permitted. It is immaterial if such an arrangement is included in a contract of employment, as a contract cannot undermine a modern award entitlement.
This is important because any work performed outside Jared’s agreed pattern of work must be paid at overtime rates – for the discrete reason that it’s outside of the agreed pattern. In order for overtime not to apply in this scenario, Jared needs to agree, in writing, to vary his regular pattern of work before he works Sharon’s shift.
No written variation agreement?
Where no agreement to vary Jared’s hours was made in writing, the employer must pay Jared overtime rates under the Retail or Fast Food Award.
The employer cannot simply “swap” Jared’s shifts later in the week either, as he may then be entitled to be paid for the shift that he did not work as well!
In the past 12 months, almost of all the significant cases involving non-compliance with the Retail Award there was at least some element of the employer not having obtained an employee’s written agreement before rostering them outside of their agreed pattern of work.
This can (and has) resulted in millions of dollars’ worth of underpayments.
How to comply with the part-time rules in the Retail and Fast Food Awards
- Ensure all part-time employees have agreed work patterns before they commence
If you do not have an agreed pattern of work in writing and before a part-time employee commences work, this is immediately a compliance issue.
The most effective way to ensure that this issue does not arise is that have a compliant contract of employment drafted specifically for the Retail or Fast Food Award because (as previously stated), not all industries have this requirement!
- Have a satisfactory method for recording variations to work patterns in writing
The classic example is asking Jared (by text or email) “are you available to work Sharon’s shift tomorrow?”, however this does not go far enough.
In the case of temporary variations however, be careful not to overuse this mechanism – as once a part-time employee loses a reasonable level of predictability, there is a risk that a court might later consider them to be, in fact casual (the reverse of the situation in WorkPac v Skene).
Some payroll and T&A systems are beginning to implement this functionality, however ultimately it’s your responsibility to ensure that whatever system you use ticks all the boxes.
- Maintain your employment records
One of the biggest problems faced by companies dealing with issues of non-compliance around these requirements, is the fact that no records have been kept of where a part-time employee has agreed to vary their agreed pattern of work.
While it is absolutely recommended to have a more robust system in place, some employers have employees sign a copy of the roster to confirm their agreement. However despite this, rosters are not being kept for the required period of 6 years.
This can lead to serious issues, as often it has it be assumed that the variation wasn’t agreed, and the employee should have been paid overtime rates.
The key takeaway
To meet obligations under the Retail and Fast Food Awards, employers must ensure that part-time employees are not treated with the same flexibility as casuals.
When making small decisions, such as cancelling a shift, calling in an employee to work or changing their roster, bigger consequences may unfold if the proper process is not followed for part-time employees.
If you’re not sure whether your treatment of part-time employees is compliant with the modern award that applies to your business, call 1800 572 679 to speak with one of our workplace relations advisors.