Are Casual Employees Entitled to Redundancy Pay?

by Ilyas Omari

September 20, 2022
Employment & HR, Legal guides

Have you ever wondered if casual employees are entitled to redundancy pay? According to section 119 of the Fair Work Act 2009 (Cth)(FWA), employees are entitled to receive redundancy pay from their employers in the event of their job being made redundant.

However, there are exceptions to this section of the Fair Work Act, particularly if the employee is casual. In this article, we’ll answer whether casual employees are entitled to redundancy pay, how redundancy pay is calculated and other frequently asked questions.

Read along!

Who is classified as a casual employee?

To find out whether casual employees are entitled to redundancy pay, it’s important to understand the legal definition of a casual employee.

Section 15A of the Fair Work Act defines a casual employee as an individual who has accepted an offer of employment from their employer on the basis that there isn’t a firm advance commitment to continuing and indefinite work according to an agreed pattern.

On this basis, casual employees usually work under the following conditions:

Inconsistent working days, hours and duration
Casual employees aren’t required to commit to all the work an employer may offer them
Casual employees usually have irregular hours of work
Casual employees are not provided entitlements that permanent employees receive, such as sick leave or annual leave
Casual employees can quit their jobs without providing their employer notice unless their employment contract specifies that they’re required to
Casual employees can have their employment terminated by their employer without being provided notice

Section 123 of the Fair Work Act states that casual employees aren’t entitled to redundancy pay.

However, casual employees are entitled to other benefits such as higher pay rates through casual loading. They also are entitled to the following National Employment Standards( NES) entitlements:

Unpaid community service leave
2 days of unpaid carer’s leave
2 days of unpaid compassionate leave per event
5 days of unpaid family and domestic violence leave (for every 12-month period)
Casual employees are provided with a path to permanent employment

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Long-term casual employee

Casual employees may become long-term casual employees after working for an employer for an extended period of time. Long-term casual employees remain casual employees until their employment terms are changed, and they become permanent employees.

This change can be made if there is a mutual agreement made between the employee and employer. This is where the employer agrees to provide ongoing work for an agreed number of hours, days, and duration.

After a minimum of 12 months of regularly working as a casual employee, long-term casual employees are granted additional rights. These entitlements include the following:

Unpaid parental leave for 12 months
The ability to request flexible working arrangements
Long-service leave
The ability to request permanent employment

However, long-term casual employees aren’t entitled to paid leave or redundancy pay and aren’t provided with a notice of termination despite the fact they have worked regularly for an extended period of time. Furthermore, employees who have worked continuously for a period of fewer than 12 months also don’t receive redundancy pay.

Unfair dismissal

If you believe you have been dismissed unfairly from your job and that you should’ve been provided with redundancy pay, you can contact the Fair Work Ombudsman. According to the Fair Work Commission, the following four elements must be present to prove that an unfair dismissal has occurred:

Dismissal of the employee
The dismissal was harsh, unjust or unreasonable
The dismissal was not due to genuine redundancy
The dismissal was inconsistent with the Small Business Fair Dismissal Code if the employee worked for a small business

If you’re unsure whether you have been unfairly dismissed and need legal advice, you should hire a lawyer.

Frequently Asked Questions( FAQs)

How is the amount of redundancy pay calculated?

An employee’s redundancy payment depends on the length of continuous service to their employer.

According to the Fair Work Commission, continuous service refers to the period of time an employee works for an employer without any interruptions to the employment.

Section 119 of the Fair Work Act outlines the redundancy payment employees are entitled to on the basis of their continuous service. For example, pursuant to this section, an employee who has worked for an employer for a continuous period of 1 year but less than 2 years is entitled to 4 weeks of redundancy pay. Whereas an employee who has worked for an employer for a continuous period of 9 years but less than 10 years is entitled to 16 weeks of redundancy pay.

When else is an employee not entitled to redundancy pay?

Section 123 of the Fair Work Act outlines the situations where employees are not entitled to redundancy pay, these include the following:

Where employees have only been employed to work during a particular period, for a particular task, or for a particular season
If an employee has been terminated due to serious misconduct
Where an employee’s employment has been limited to the time period they undertake a training arrangement or any particular time period