Redundancy: does casual employment count?

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Redundancy: does casual employment count?

Redundancy pay is based on continuous service; so, is a period of employment as a casual employee taken into account?

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Redundancy pay is based on continuous service; so, is a period of employment as a casual employee taken into account?

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Due to the economic climate, a number of positions will become redundant at the end of the financial year.

One employee whose position will become redundant has been employed by the company for approximately seven years, however, for the first 18 months of employment, the employee was employed on a casual basis.

For the remaining five and a half years, the employee has been employed on a full-time basis.

While the employee has an entitlement to redundancy pay under the National Employment Standards (NES), it has been queried whether a period of casual employment should be excluded from the total amount of service when calculating their redundancy pay.

The redundancy provisions under the NES exclude casual employees from an entitlement to redundancy pay.

In this case, does this mean the employee is only entitled to redundancy pay calculated on five years of completed service?

The entitlement to redundancy pay under the NES is based on an employee’s continuous service with the employer.

While a casual employee is not entitled to receive redundancy pay under the Fair Work Act 2009 (s123(1)(c), the employee is currently a full-time employee and would be eligible for redundancy pay.

Under the Fair Work Act (s22(1)), a period of ‘service’ (among other matters) is a period during which the employee is employed by the employer.

Meaning of ‘casual employee’

The meaning of ‘casual employee’ is not defined by the Fair Work Act, therefore, the company would need to determine the true nature of the employment relationship for the first 18 months of employment.

If there were periods during which the employee was not employed (eg called in as required) this would generally be indicative of casual employment and, consequently, would not count as service.

However, if the employee worked full-time weekly hours (eg 38) during the first 18 months of employment, it could be argued he or she was indeed a full-time employee and, consequently, the period would count as service for the purpose of redundancy pay.

If the employee’s initial period of employment with the company was actually determined to be casual, service would have commenced when the employee converted to full-time employment with the company.
 
Service prior to 1 January 2010

For service prior to 1 January 2010 to count for the purposes of redundancy pay there must be an existing entitlement to redundancy under a contract of employment, pre-reform award or another applicable industrial instrument prior to 1 January 2010.
 


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