In this week’s article we look at the question of whether you can change the status of an employee’s employment such as from full-time or part-time to casual. This was the subject of a recent decision of the Fair Work Commission which we discuss further below.
Why would a change be needed?
There are various reasons why an employer may seek to reclassify their employees from permanent to casual such as needing greater flexibility with rostering or being unable to provide a permanent employee with their guaranteed hours.
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 can not 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. If an employee does not agree to a contract variation, and the employer proceeds with the change, then this may be seen as a repudiation (i.e. a serious breach) of the employment contract and the employee may be considered to have been dismissed. This would then open the door to claims from the employee (e.g. that the dismissal was unfair).
These rules are not limited to changing the employment status of an employee but applies to the whole of an employment agreement between the employer and the employee and applies regardless of whether the contract of employment is written, oral or partly written and partly oral.
This question was the subject of a recent case in the Fair Work Commission where Commissioner Durham was required to decide whether a kitchen hand who was made casual was dismissed for the purpose of the general protections provisions of the Fair Work Act 2009 (Cth).
This matter involved a jurisdictional objection to a general protection claim in which the Respondent Hey Mr. Pty Ltd (represented by their director Mr Seo) sought to argue that the Applicant (Ms Kuloglu) was not dismissed when she was reclassified as a casual employee from a part-time employee.
Ms Kuloglu commenced employment with the Respondent in February 2023 as a part-time kitchen hand. Whilst there was no formal documentation Ms Kuloglu’s payslips indicated that she was a part-time employee who accrued annual and personal/carer’s leave. Ms Kuloglu has a limited understanding of English, and was a qualified engineer in her home country of Turkey who intended to resume her career as an engineer after she has learnt english. As she was currently studying, Ms Kuloglu could only work a maximum of 20 hours per week.
On 14 April Ms Kuloglu took a day of personal leave and indicated that she would need some time off in the following week to see her doctor and recover from back pain she had been experiencing, however she indicated that she would work the upcoming weekend as she didnt want to leave the Respondent “in trouble”. On the following day Ms Kuloglu attended work as promised however Mr Seo asked her to finish 30 minutes early and offered to drive her home. During this car ride Mr Seo informed Ms Kuloglu that she was not right for the position and that the Respondent would need to look for a new kitchen hand, although he did not indicate that her employment would need to end immediately.
Later that night Ms Kuloglu noticed that the position of part-time Kitchen Hand at the Respondent was being advertised online and when the roster was posted for the following week she had been allocated to work far in excess of her 20 hours per week. This continued into the next week whereby Ms Kuloglu worked excessive hours to the point she describes as feeling like Mr Seo was trying to force her to quit.
As a result of the increased workload Ms Kuloglu informed Mr Seo that she would need to take the following week off as sick leave and provided a medical certificate for that period. Later that evening Ms Kuloglu noticed the usually very active work Whatsapp group had gone silent and the next day was informed by Mr Seo via text that she would now be a casual employee.
It was Mr Seo’s position that he did not dismiss Ms Kuloglu, rather he simply changed her position from part-time to casual. He sought to argue that as Ms Kuloglu was not available to work he was left with no other choice than to advertise for a new kitchen hand and “move” Ms Kuloglu to a casual position so that he could offer hours to the new employee. It was Ms Kuloglu’s position that the relationship between herself and her employer changed after she had taken 2 days of personal/carer’s leave.
In favouring Ms Kuloglu’s position, the Commissioner highlighted that although Mr Seo did not fully comprehend the difference between part-time and casual employment he had the intention of ending Ms Kuloglu’s part-time employment and moving her into a casual position. The Commissioner also highlighted that Mr Seo did not have an understanding that an employer cannot simply “change” an employee from one type of employment to another at their election, or “due to company circumstances”.
Commissioner Durham found for the following reasons that Mr Seo had clearly indicated an intention to bring the employment relationship to an end, or had the probable effect of bringing the relationship to an end:
- Mr Seo advised Ms Kuloglu to look for another job as he needed to replace her.
- Mr Seo subsequently advertised Ms Kuloglu’s job whilst Ms Kuloglu was still employed in this role.
- Mr Seo assigned shifts to “new kitchen hand” in the roster whilst Ms Kuloglu was still employed in this role.
- The day after notifying Mr Seo that she needed to take additional sick leave, Ms Kuloglu was sent a text message indicating that, from the next week, she would be moved to casual.
- Ms Kuloglu was advised that her leave entitlements would be paid out; and,
- No further contact was made with her from this point.
Having rejected the Respondent’s jurisdictional objection Commissioner Duhrnam found that Ms Kuloglu was dismissed and was allowed to pursue her general protections claim.
This case serves as a reminder for employers that you can not unilaterally change or amend an employee’s employment contract regardless of whether that contract is written, oral or partly written and partly oral. If you need to amend an employee’s contract this can only be done with the employee’s approval or as in the above case can result in the employee being dismissed and entitled to bring a claim against the business.
Need further help?
If you need any assistance with employment contracts, or understanding your rights and obligations under them as an employer, please contact EI Legal at: email@example.com.