Part of the confusion about casual hires stems from a lack of clarity in New Zealand's employment legislation
Because of the unique terms and conditions of their hiring, casual workers are often mistaken for fixed-term as well as permanent part-time employees.
Part of the confusion stems from the fact that New Zealand’s employment legislation fails to define the idea of the ‘casual employee’ as clearly and as extensively as other types of employment.
Casual vs fixed-term employees
Casual hires are among the last segments of the labour force to be deployed when the need suddenly arises and for a specific purpose, such as waiting tables or doing research for a project.
There is no guarantee of continued work. The stint typically lasts from a few hours to a few weeks but rarely beyond that period.
In contrast, fixed-term employees are called in to take on multiple tasks within a given role and offered a pre-determined period of employment, such as covering for an employee on parental leave.
READ MORE: How to properly dismiss a poor performing employee
Can employers hire a casual without a contract?
A common myth is that employers can hire on-call casuals without signing an agreement between the parties. But just like any employee, casuals require a proper contract that must stipulate the changing nature of their work. These include:
The Ministry of Business, Innovation and Employment provides employers with a handy tool for creating an agreement suitable to different types of employment.
While casuals can expect to work irregular hours or days, the overall duration of their contract should not exceed a total of one year for it to be considered casual employment.
Each time a casual shows up to work can be considered a separate agreement, experts from New Zealand law firm Bell Gully advise.
“A casual employment relationship may change over time to become permanent in the event that engagements become regular or routine,” they add.
READ MORE: Why employers should set up a bargaining process agreement
Can employers skip on leave entitlements for casuals?
Another common myth is that casuals are not covered by the same rights as tenured workers. They are but with a few exceptions.
Casuals are entitled to holidays but – owing to their irregular and intermittent work schedule – they might opt to receive an additional 8% of their pay in place of their annual leave.
Employment New Zealand cautions employers on the pay-as-you-go scheme: “Don’t assume that just because an employee is employed on a ‘casual’ employment agreement they will automatically qualify for annual holiday pay on a pay-as-you-go basis. It is the employee’s work pattern that qualifies them for pay-as-you-go annual holiday pay, rather than their employment agreement type (apart from fixed-term agreements of less than 12 months).”
“To be paid holiday pay on a pay-as-you-go basis, the employee’s work pattern must be so intermittent or irregular that it isn’t possible or practicable to provide 4 weeks’ paid annual holiday,” Employment New Zealand writes.
Casuals may also be given sick leave and bereavement leave after six months of having worked a minimum of 10 hours per week, on average, and a minimum of one hour per week or 40 hours per month.
Learn more about Holiday Act calculations at the HRD Employment Law Masterclass in Wellington on 13 May. Register now.
