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Complacency with Casuals Could Cost Employers

Complacency with Casuals Could Cost Employers

Labour day is fast approaching again, and although for many people this just means an extra day off, it is actually there to celebrate the eight hour working day, which came into effect in the late 1800’s.

Ironically, more than a century later, the 8 hour day is becoming less and less common as other types of work arrangements are starting to come into favour.

Whilst salary’s dominate the majority of the New Zealand workforce - wages, part time, permanent part time and casual are alternative types of work that have increasingly risen over the years.

Casual employees are up there, with tens of 1000’s of New Zealanders working casually, often more than one job.

But the casual working arrangement can cause  problems and could cost employers thousands of dollars if they are not fully clued up as to their rights and obligations as an employer.

So how do employers know what they can and can’t do? The most obvious answer is to look up the Employment Relations Act and Holidays Act to get an overview on casual employment.

Wrong.  In the hundreds and hundreds of pages of these two acts, there is not a single mention of the word casual And no reference to ‘casual’ employment.

So what is it called and what exactly is a casual working arrangement?  It is generally when the boss invites you to work with no promises of ongoing work.  Genuine casual employment might mean an employee who works occasionally to cover for sickness.
It’s a big part of New Zealand and suits employers who can’t promise reliable work every day.

And in turn it suits the employee who likes variety and perhaps also can’t commit to a fixed schedule, as that employee is under no obligation to say yes when asked.

But a casual will easily morph into a regular pattern which in turn creates a subconscious expectation of ongoing work.

The problem occurs when this pattern continues for a decent period of time – maybe the original contract is forgotten OR the employer is aware of the contract but wants the security of being able to drop the employee at any time without notice.  An example of that would be a café that is busy most of the year but quiet over January holidays.  The employer might prefer to keep the arrangement so they don’t lose money having an employee doing little over that period.

However, you would expect if the casual employee can turn down the employer's offer to work a shift, then we would assume the employer is also not compelled to offer work from one week to the next.

Not exactly.  The problem arises when a fixed working pattern becomes established then suddenly the employer finds that they no longer need that person to work one of those regular days anymore.  This can throw the employee off guard.  

Telling the employee that they are no longer required for even one of those days could land the employer in hot water. In this scenario, the law says that the causal worker has the right to expect ongoing invitations to work those same hours each week that they have become accustomed to. 

And so much so that they can actually take their employer to court for unjustified dismissal.  

How can this be? 
Well, in the ERA is reference to “fixed term employment” agreements.

Officially casual employment is really multi fixed term employment agreements all stuck together to form what ordinary people call a casual relationship.

Each time a casual works that is technically referred to as one fixed term of employment.  This works quite nicely when the worker occasionally comes in to help unload a shipping container.  But not when the job becomes a weekly or fortnightly event.

There are other implications that can cause a headache for employers in this scenario.  Holiday pay.

The second major employment law is the Holidays Act.  But yet again it makes no mention of casual employment.

The Holidays Act allows a casual employee to be paid their holiday pay as they go – ie 8% extra is added to their wage packet each payday.  But only if that employee works for less than a year.

If the working arrangement runs past a year, as it did in one recent employment case, then the worker is entitled to claim for holidays – on top of that 8%.

Take the case of a security firm who employed a female as a casual and decided to keep her on. She ended up staying there seven years.  However, when it was time to leave she asked to be paid her holiday pay.  Her boss showed her copies of her payslips that showing the extra 8% in her pay packet for holiday pay.

She did not like that answer and went to a lawyer and took a case.  The employment judiciary ordered the employer to pay her the holiday pay again, meaning she got $21, 000 holiday pay twice.

The fundamental mistake that employer made was not revisiting the workers written employment agreement before the 12 months were up.  

Despite both parties agreeing that she was a ‘casual’, the judge decided that she was a permanent employee and therefore made her ruling based on the fact that all permanent employees are entitled to four weeks holiday pay per year.

There is a stark lesson to be learnt here for anyone that believes they are casually employed – and even more so for employers thinking casual employment is the easiest way forward.  

Think again. Casual, whilst having a place in the work environment, does not have a specific law that guides you.  Therefore unless your casual worker is working on a purely random basis and very occasionally, tread very carefully as to what situations could entail.

Complacency could cost you.



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