Employment Law Article

Can an employer change an employee from permanent to casual?

Whilst it is common for businesses to consider changing a casual employee to permanent part-time or full-time, it isn’t common to do the reverse – from permanent to casual. As such, if your business is looking at changing an employee’s employment status to casual or your employer has offered you a change in employment status, what do you need to know?

What does the Law say?

Whilst there may be reasons why an employer would wish to take such actions, it is well established that an employer cannot unilaterally change the terms of an employee’s employment contract (i.e. without the employee’s agreement). This is because an employment contract is a legally binding document that is entered into by two parties, meaning that any variation to the contract requires the consent of both parties before it takes effect.

What happens if an Employee does consent?

Where an employee agrees to move from permanent part-time or full-time to casual, whether at the request of the employee or mutually agreed, an employer will be required to carry out their obligations by ending that employee’s current employment. This means the employer must provide the employee the required notice and leave and entitlements payout. Once an employee’s current employment has ended, they can be onboarded as a casual employee.

What happens if an Employee does not consent?

If an employee does not agree to a contract variation, and the employer proceeds with the change, this may be seen as a repudiation (i.e. a serious breach) of the employment contract. This could then open the door to claims from the employee including unfair dismissal. 

As such, in the event the employee does not consent to move to casual employment, a number of factors need to be considered by the employer before taking any steps including:

1)   checking whether the employment contract, registered agreement or award makes any

        provisions for changing the employee’s work hours without their agreement;

2)   ascertaining whether the change if it occurs, makes a new employment contract or simply

       changes the existing contract;

3)   determining what entitlements and leave will need to be paid out; and

4)   confirming how much notice is required.

Together, this information can help determine whether or not an employer may be able to change the employee’s employment to casual without their agreement.

Need further help?

These rules are not limited to changing the employment status of an employee but apply to the whole of an employment agreement between the employer and the employee and apply regardless of whether the contract of employment is written, oral or partly written and partly oral.

If you need any assistance with employment contracts or understanding your rights and obligations under them as an employer or employee, please contact our office.

Disclaimer: This article is for general understanding and should not be used as a substitute for professional legal advice. Any reliance on the information is strictly at the user's risk, and there is no intention to create a lawyer-client relationship from this general communication.