28 Feb 2023
Casual or Permanent?
This is a frequent challenge for employers to negotiate. Some employees want to be “casual” and that can work really well for employers too, but there can be significant risk to the employer if it goes wrong (usually when the employment is ending).
It is not just a matter of one or the other deciding they want it to be “casual”, or just putting those words in the Employment Agreement. What actually happens is what really matters. Here are some points to consider:
- Is it clearly stated in the Agreement? Yes you do need an employment agreement for casual staff, and you need to keep track of their hours. The agreement needs wording such as “Your casual hours of work will depend on our work requirements. There is no obligation on us to offer you casual work or on you to accept casual work we offer. Our offer to provide you with casual work, and yours to perform it, is limited to the terms of any offer made and accepted. The hours worked will be as determined by (Company Name). There is no guarantee either given or implied as to the amount of work, or duration of work that may be offered.”
- Can you show evidence of offering periods of work, that the employee can accept or decline? This is often one shift / one day at a time, but could be a week of work or another time period. Employers who frequently offer work to casual staff should have a standard process such as notifying casual staff by email of available shifts once a week, then casual staff indicate by return email if they want any of those shifts, and then the employer confirms who will do the work.
- Can you show evidence of the employee exercising their right to decline offered work? Or not make themself available? This needs to be more than just asking for a few days off, which would amount to requesting annual leave for a permanent employee.
- Is there a pattern of work occurring? This is a decision point, the employer needs to consider whether it is actually a permanent role (could be with flexible hours / days) or genuinely casual, or perhaps you have a genuine reason to offer a defined fixed term agreement. This could be for a project, or to help during a seasonal busy time, or cover while an employee is off work due to injury.
- Do employee and employer both fully understand and agree the nature of the arrangement? If you have a meeting to discuss it, take notes, and email them to the employee afterwards so you both have a copy. Remember – the risk (and arguably the power) sits with the employer, so the employer needs to put the effort in to get this right.
- If there is some uncertainty, don’t treat them as casual. Preferably give them a new permanent (or fixed term) employment agreement. The most important time that this matters is if you want to change / reduce their hours, or stop offering them work. To reduce risk of a personal grievance, do the same level of proposal / consultation / decision, or investigation / disciplinary meeting / decision as you would for a permanent employee before reducing. changing or ending their employment.
If you are interested in the case law, here is an explanation: The distinction between casual employment and ongoing employment lies in the extent to which the parties have mutual employment related obligations between periods of work. If those obligations only exist during periods of work, the employment will be regarded as casual. If there are mutual obligations which continue between periods of work, there will be an ongoing employment relationship. The strongest indicator of ongoing employment will be that the employer has an obligation to offer the employee further work which may become available and that the employee has an obligation to carry out that work. Other obligations may also indicate an ongoing employment relationship but, if there are truly no obligations to provide and perform work, they are unlikely to suffice. (Jinkinson v Oceana Gold (NZ) Ltd  ERNZ 225 (EmpC).)
If you are unsure, give us a call. We will help you consider the right thing to do for both your business and your employee, which will have the added benefit of reducing the risk of a potentially expensive personal grievance process.
By Meredith MacKenzie, People & Culture Specialist