Employment Type Definitions & Entitlements
From the day you hire your first employee, you need to understand how your employee can be engaged. This way you can accurately advertise for a fixed-term, casual, permanent or other position when the time comes.
Having a complete understanding of the varying types of employment engagements is vital to your business.
In particular, you need to understand distinct employment contract types, establishing a clear permanent employee meaning alongside casual and fixed-term roles.
The employment contract should reflect the type of engagement which the employee will be employed under, as well as the employment conditions that are agreed between the employer and employee.
Keep reading to learn about different some common employment engagements, along with some of the most frequently asked questions about employment status.
Types of Employment
Not all employment engagements are the same. Each type of employment engagement brings with it a different set of obligations for the employer and rights for the employee. Are you confident analyzing casual vs full time, or navigating fixed term vs permanent arrangements?
The following information is general in nature. The applicable Modern Award or enterprise bargaining agreement may provide different entitlements and definitions than discussed below.
Permanent Employment (Full-time or Part-time)
Permanent employment is the most common employment type in Australia. Understanding the permanent part time meaning alongside full-time options covers both of these core groups
It is common for permanent employees to agree in advance to employment conditions including that they will work certain days and hours for the company on an ongoing basis until their employment is terminated one way or another (via resignation, redundancy, dismissal for misconduct, etc). This means they can expect to work regular hours each week for an indefinite period of time.
Permanent employees are entitled to various entitlements including, but not limited to, paid annual leave, paid sick leave, paid long service leave and notice of termination. In many cases, these entitlements might be applied on a pro-rata basis for part-time employees.
Casual Employment
Casual employment has been determined by the courts and it will depend on the manner in which the casual employee is engaged if they are casual or not ie whether the employment is ad hoc, or if there is a firm advance commitment of ongoing employment.
A standard casual employment contract may outline operational hours, but because people ask do casual employees get annual leave, it must specify that paid time off is excluded, however, generally should not include any guarantee to ongoing work (unless a Modern Award or enterprise bargaining agreement provides otherwise). This means that contract should not provide a minimum or maximum number of hours per week.
Temporary vs permanent employment
You can hire temporary employees to meet temporary business demands.
Temporary employees often come in the form of a new fixed-term or casual employee or may be engaged as a contractor.
The fixed-term and casual employment types provide employers with the flexibility to more easily manage the uncertainty of temporary employment. If you’re thinking about making some temporary hires, this article outlines the pros and cons of fixed-term and casual staff.
Keep in mind that the applicable Modern Award or enterprise bargaining agreement may contain specific provisions for hiring temporary employees.
If you are wanting to engage a contractor to fulfil your temporary needs, then you should review your contractor arrangements to identify any risks of sham contracting.
Casual vs Permanent Employment: Key Differences
Permanent employees arguably have the strongest job security of these three types of employment. They have a contract that states their agreed hours and are expected to attend work for their contract hours (when not on leave or another approved absence).
Permanent employees are entitled to most of the commonly known workplace entitlements – including paid leave and notice of termination, amongst other things.
Both permanent and regular and systematic casuals become entitled to claim unfair dismissal after their minimum employment period. Permanent employees, in contrast, have an expectation of ongoing work from their initial engagement, whereas casuals do not.
Base casual employee entitlements do not generally include access to paid leave, and these workers may lack access to unfair dismissal provisions. Employers have much more flexibility with regards to giving casuals notice of termination. Employers do not generally need to give casual employees notice, however may need to be cautious of minimum engagement periods in Modern Awards.
However, casuals are entitled to casual loading (generally 25% on top of minimum hourly rate) and do not have to be available to work.
Employees on fixed-term contracts have some of the same entitlements as permanent employees in equivalent roles. If the employee has not been engaged on back to back contracts and their employment is ended in line with the specific end date or project as outlined in their employment contract, they should not have access to unfair dismissal.
If you are still unsure, get peace of mind by speaking to an Peninsula specialist for free initial advice today on 1300 761 935.
Employment Type Comparisons: Key Differences
| Comparison | Key Difference |
|---|---|
| Fixed‑Term vs Permanent | Fixed‑term ends on a set date; permanent is ongoing with full entitlements. |
| Fixed‑term vs Contractor | Fixed‑term offers employee entitlements; contractor is self‑employed with no employee rights. |
| Casual vs Permanent | Casual has no guaranteed hours + loading; permanent has regular hours + paid leave. |
| Casual vs Temporary | Casual = irregular ongoing; temporary = short‑term fixed‑term or contractor. |
| Full‑time vs Part‑time | Both permanent; part‑time works fewer regular hours with pro‑rata entitlements. |
| Part‑time vs Permanent Part‑time | Permanent part‑time is the legal term; part‑time is often used informally. |
What is a fixed term contract?
Fixed-term employees have the same entitlements as a permanent full-time or part-time employee. This specific arrangement differs from permanent roles because the agreement operates strictly on a fixed term contract meaning (e.g. 12 months) or for the duration of a specific project as opposed to an ongoing employment arrangement. The contract for a fixed-term employee states directly when the term of employment will end.
Fixed-term employees are often engaged to cover for an absent employee (e.g. as maternity leave cover), to fill a human resources gap, or staff a big project. Typically, fixed-term contracts will run anywhere from a few months to a year, however, can also be for as long as a few years.
Fixed-term employees have the same rights under the applicable industrial instrument as permanent employees such as leave entitlements and allowances.
Want To Know More?
When you understand the difference between employee status’, you can start hiring purposefully.
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