Minimum shifts and cancelled shifts: what you pay for when you book casual workers

Every peak season we have the same conversation with a site manager. The work ran out early, or the truck never turned up, and they want to know why four hours are still payable for a crew that was on the floor for ninety minutes.

It's a reasonable question. The answer isn't an agency policy. It sits in the award, and it applies whether the casual is on your payroll or ours.

"Casual" doesn't mean "pay by the minute"

Casual employment is flexible in a specific way. The Fair Work Ombudsman describes a casual as someone whose employment has no firm advance commitment to ongoing work, and who is paid a casual loading or a specific casual rate. You can offer a shift or not; the worker can take it or not.

What that flexibility does not give you is the right to pay only for the minutes you ended up needing once a shift has started. Most awards put a floor under each casual shift, usually called the minimum engagement or minimum payment.

The number in the warehouse award

For most of the warehouse, distribution and container unloading work we staff, the relevant award is the Storage Services and Wholesale Award 2020. Clause 11.1 is one sentence long:

A casual employee will be guaranteed not less than 4 hours' engagement every start.

So the floor is four hours, every start. A casual who works a two-hour unload is paid for four. The casual loading under clause 11.2 (25% on the minimum hourly rate for ordinary hours) applies to those hours as well.

Two related points from the same award are worth knowing:

• Part-timers have a different floor. Under clause 10.5, a part-time employee must be rostered for a minimum of three consecutive hours on any shift.
• Call-backs and public holidays carry their own minimums. The award also sets four-hour minimums for employees called back to work and for employees required to work on a public holiday.

Does this apply to labour hire workers?

Yes. The award says in its coverage clause (clause 4.4) that it covers employers who supply labour on an on-hire basis in the storage services and wholesale industry, and their on-hire employees while they are working for a business in that industry.

In practice that means when we send a casual to your warehouse, we are the employer and we owe that worker the four-hour minimum. Labour hire charges are normally built on the hours the worker must be paid, so expect the minimum to flow through; your provider's terms will say how. Using an agency doesn't remove the minimum engagement. It moves the payroll, not the obligation.

One caution: the award that applies depends on the work and the industry, not on the word "warehouse" over the door. A manufacturing site, a retail back-of-house or a business with its own enterprise agreement may have a different minimum. Check which instrument covers your site before you assume four hours.

Sending people home early

This is the most common scenario, and the Fair Work Ombudsman's guidance is direct. If an employer sends an employee home early because they are no longer needed, the employee is still paid:

• for the hours they would normally have worked that day, if they are full-time or part-time; or
• their minimum payment for the shift under the award, if they are casual.

The Ombudsman also says a casual must be paid the whole minimum payment even if they aren't required to work the whole time.

Put some hours on it. You book six casuals for an eight-hour unload. The work is done in two hours and you release everyone. Under the Storage Services award, each person is owed four hours by their employer, so that is 24 paid hours for 12 hours of work. It is a real cost, and better planned for than discovered afterwards.

The other side of that example matters too. The minimum is a floor, not the full rostered shift. For a casual, the award guarantee is the four hours, not the eight you originally booked.

The narrow exception: stand down

There is a situation where employees can be sent home without pay. The Fair Work Ombudsman describes it this way: an employee can only be stood down if the business can't operate because of a circumstance outside the employer's control.

That is a narrow test, and the Ombudsman's wording is about the business being unable to operate. We would not treat a quiet morning, or work finishing sooner than planned, as meeting it. If you think a stand down might apply to your situation, get advice before you rely on it, because the starting position is that people are paid.

Cancelling before the shift starts

This is where we have to be honest about what the rules do and don't spell out.

The award guarantee is tied to "every start". The Ombudsman's guidance we have cited deals with people who have already come to work and are sent home. Neither of those pages sets out a fixed number of hours' notice for cancelling a casual's shift before it begins under this award, so we are not going to quote you one.

What we can tell you:

• Shiftworkers have a roster rule. For shiftworkers, clause 20.5 says shifts are rostered at least 48 hours in advance, and set times can then be changed by agreement, or by the employer on 24 hours' notice where the change is caused by circumstances outside the employer's control.
• Roster changes generally involve talking to people first. The Ombudsman's guidance on rosters says an employer who wants to change an employee's regular roster or ordinary hours needs to discuss it with employees first, give them information about the change, and invite and consider their views. Awards and agreements can add further rules.
• Your agreement with your agency will have its own terms. Separately from the award, labour hire terms of business normally say how much notice is needed to cancel a booking without charge. That is a commercial term, not an award rule, and it is worth reading before your first late cancellation rather than after.

There is also a practical cost that no clause captures. A worker who is cancelled at 5am twice in a fortnight will take someone else's shifts next time. Reliable sites get reliable crews.

How to avoid paying for hours you don't use

Most of the cost here is avoidable with a bit of planning.

1. Book to the minimum, not under it. If a job is realistically two hours, pair it with something else: a second container, pallet rework, a stocktake count, a clean-down. Have a standing list of filler tasks.
2. Stagger your starts. Bring two people in for the first arrival and the rest once the truck is confirmed on site.
3. Confirm the day before. A quick check with your carrier the afternoon before saves more money than any rate negotiation.
4. Call your agency as soon as plans change. The earlier your provider knows, the more options there are, for you and for the workers.
5. Ask about the cancellation terms upfront. Know the cut-off before peak season starts. Our post on planning a peak-season workforce covers the other items worth settling early.
6. Look at the pattern. If you are regularly booking the same casuals for the same hours, that raises different questions, which we cover in our piece on the casual to permanent pathway.

The short version

Under the Storage Services and Wholesale Award, a casual is guaranteed four hours every start, and that applies to on-hire workers too. Send someone home early and the minimum is still paid. Unpaid stand down is a narrow exception. Cancelling before the shift is governed more by roster rules and your commercial terms than by a single number.

If you would like help sizing crews so you are not paying for idle hours, have a look at how we staff warehouse and distribution sites, or tell us what you need. We aim to reply within two business hours.

General information only, current at the time of writing — not legal advice. Awards and agreements differ; confirm which one covers your site with the Fair Work Ombudsman or a qualified adviser.