When should you offer casual employees a permanent position?
Do you know the rules around when to offer casual employees a permanent position?
Recent court cases involving casual workers have increased attention on casual worker classification, which means your workers may be more aware of the ability to convert to a permanent position.
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The law has not changed; however, these cases are good reminders for employers to be aware of the rules around converting casual employees to permanent positions.
What Makes an Employee Casual?
- No expectation or commitment about duration of employment.
- No guaranteed hours of work.
- Usually works irregular hours.
- Is not entitled to paid leave.
- Can usually end employment without notice.
Note that there is such a thing as a long-term casual employee. Long-term casuals may be eligible for flexible working arrangements, parental leave and long service leave, even though they don’t have guaranteed hours of work or expectation of ongoing work.
When Does a Casual Employee Become Permanent?
This is addressed in most modern awards in a casual conversion clause. Employers should check the relevant award provisions to see if there is an obligation to offer a part-time or full-time position, then follow the directions about offering permanent positions.
Example of Casual Conversion Rules
Each award must be checked for details, however there are similar guiding principles.
- Casual employees are entitled to ask to change to full-time or part-time employment when they have worked a regular pattern of hours over a set period (usually 6 to 12 months) and could reasonably expect to continue to work those hours as a full-time or part-time employee without significant changes.
- Employers must specifically notify casual employees about this entitlement within 12 months of the casual start date.
- Casual employees that do not receive notification of this entitlement are still entitled to request a change to full-time or part-time employment.
- An employer can only refuse the request if there are ‘reasonable grounds’ such as the employee not working regular hours or there are other significant changes to the current work patterns.
There are more provisions and details in each award’s casual conversion clause – employers need to check the applicable award to make sure they comply with the casual conversion requirements.
Visit the Fair Work Ombudsman Casual Employees webpage
for more detail.
Talk to us if we can help with payroll management and assessing the classification of your workers.
Managing the gap between the receiving money into your business and paying money out of your business is vital for sustaining viability. Debtor days is the average number of days taken for a business to receive payment for goods or services. Keeping track of the average number of days for a business to receive payment is important in understanding the cashflow gap you might experience and the impact on cashflow planning and budgets. How to Calculate Debtor Days (Year-end receivables amount ÷ annual sales) x 365 days = average debtor days. Here's an example: An IT consultant has in her terms and conditions that payment is due 21 days after invoice date. But she is interested to know what the actual average payment time is. Trade debtors at 30 June 2019 = $35,000 Annual sales for 2019 = $478,000 (35,000 ÷ 478,000) x 365 = 26.7 days With this information, she can either alter her cashflow planning according to the actual time-frame or take steps to reduce the average number of debtor days. What can you do to reduce the payment times? Update your payment terms - and make sure the terms are clear on every invoice issued. Don’t forget to include bank details on the invoice! Regular admin - schedule a regular time for your own administration and get your invoices out promptly. Send to the right person - when you send invoices, make sure you address the email personally to your contact. Send the invoice to multiple addresses if possible, for example, your contact and the accounts department. Use technology to your advantage - use automated invoice reminders to notify customers when an invoice is about to be due and then when it is overdue. Do not wait to send notifications manually, let the software do it as soon as the invoice is a day overdue. Make it easy for your customers – list the payment terms, for example, due in 14 days, as well as the actual due date. Provide incentives for early payment - for example, a 5% discount if paid within five days. Offer several payment methods for clients - make it easy to pay by adding an online option such as credit card or PayPal. Offer instalment payment plans - over a mutually agreed period. This allows you to plan for part payments, rather than being inconvenienced by the whole invoice being paid late. Do not offer unlimited credit to customers - make sure your terms and conditions include the right to refuse further supply if invoices are outstanding. Request part or full payment before supplying more goods or services. Talk to your suppliers - Maintain good relationships and clear communications so they are more likely to help you if you need an extension on your bills. If possible, renegotiate supplier terms that suit your business cashflow. During tough times it can be difficult to get paid on time. Use low activity phases in your business to update your terms and conditions, implement alternative payment options, think about ways of making it easy for customers to pay you and clarify information on your website. Talk to us about adding payment options, updating your software and improving business systems to assist in reducing the number of debtor days to improve your cashflow. We can also look at average debtor days of your business compared to industry averages and discuss ways of managing cashflow during difficult periods.
Cash is oxygen for your business and measuring working capital is your regular health check to keep your business alive; especially in turbulent times. #WeCanHelp identify strategies to increase #WorkingCapital
Making time to look over your financial reports each month is an important task for any business owner. We can give you an overview of what reports you'll need to help you build a thriving business.
