Service as a casual employee now included when calculating redundancy pay

casual retail employee

Service as a casual employee now included when calculating redundancy pay

A recent decision by a Full Bench of the Fair Work Commission has found that regular and systematic periods of casual employment must be taken into account as ‘service’ when calculating redundancy pay.

Previously, redundancy pay was calculated to reference to full or part-time service only, and not service as a casual employee.  This is because it was considered that the casual loading compensated casual employees for leave and redundancy entitlements.

However, the decision in AMWU v Donau Pty Ltd [2016] FWCFB 3075 has taken a broad view of continuous service and require certain previous casual employment to count towards total redundancy pay.

Employers must now carefully consider the consequences when a regular and systematic casual employee transitions to full or part-time employment, without a break in service.  In these circumstances, should the employee’s permanent role be made redundant, the period of casual employment must be included when calculating the number of years of continuous service for the purpose of redundancy pay.

It should be noted that genuine casual employees do not receive redundancy pay, only those that have transitioned to permanent employment.

The full decision can be accessed here.

For further information about redundancy pay, please contact the Canberra Business Chamber’s Workplace Relations team on 1300 277 881.