Earlier this week I had the pleasure of meeting a lovely young lady, who I will call, Jane.
Jane had applied for a full-time permanent role but was offered and signed a casual contract. Before signing she asked questions and sought advice on why it is a casual employment agreement and what that meant for her.
She probably asked more questions than most. This was because she had a family that relied on her income. It was December and she needed work over the Christmas period to pay the bills and buy presents for her family. So she signed the contract. She took, what I like to call, the ‘suck it and see’ approach.
The suck it and see approach to casual employment arrangements
This approach is when the potential employee senses it is not the job for them, but they need the money and so do it anyway.
Employers and Managers get suck into this too. After an interview or meeting a potential candidate they may say – “Jane is a nice person but she is not what we are looking for. But we need people. Lets give her a go on a casual agreement and if it doesn’t work out we won’t give her any work and let her go”.
What happened to Jane?
Long story short, it didn’t work out well for Jane. In fact it was the second time her casual employment was ended due to inefficient shifts in the previous six months. This latest one however was a bit dodgy. The poor performing staff were the ones getting shifts that were apparently no longer available. These poor performers were known for not turning up to work and Jane had to cover for them. She was gutted it ended like that and smelled a rat.
As we head into the peak recruitment season, many people are looking for a change in the new year, and employers are looking to fill jobs for the year ahead. I want to make sure employers and employees know when a casual employment arrangement is really casual. If it is not casual, it is either fixed term temporary or permanent employment.
When is a casual employment arrangement genuine?
Without getting into legal speak, below are the key requirements of a genuine casual employment arrangement:
- Work is available based on an ‘as and when required’ basis.
- There is no obligation on the employer to offer work.
- There is no obligation on the employee to accept work.
- It is usually ad-hoc, hard to predict and variable.
- There is no guarantee or expectation of ongoing work.
- There is no entitlement to sick leave or bereavement leave unless the employee works more an average of at least 10 hours a week, and at least one hour a week or 40 hours a month, after a period of 6 months or more.
- There is no accrual of annual holidays. Instead 8% holiday pay is usually paid as part of the employees weekly/fortnightly pay.
- Each time the employee accepts an offer of work it is treated as a new period of employment.
An example of genuine casual employment:
Peter is an Activities Assistant on a casual employment agreement for a childcare centre. He is on-call to cover sickness or staff leave. He doesn’t have any set shifts and can say no to work when it clashes with his other part-time work. There is no pressure on him or the centre manager. One week he can get lots of shifts and others nothing. Sometimes he will only get a couple hours of notice to come in.
Examples that do not meet the requirements for a genuine casual employment:
Joss is a Builder who has been on a casual employment agreement for the past 8 months. Initially he was on the job, a couple of days a week for a few hours at a time. This varied from week to week as it was hard to predict how much work was on due to weather and sub-contractors progress.
8 months later and for the past 8 weeks or so, he has been working almost full time every week. The team and his manager expect him to turn up each day, for a full day. His manager is even planning work in advance for him. One builder left a few weeks ago and the boss hasn’t done anything to replace him. The once casual arrangement has now evolved into a full-time arrangement.
Mark is a Marketing Consultant engaged to help with a social media and promotions campaign. He was at first engaged on an as and when required basis to publish content while the internal Marketing Advisor was on leave. Due to an increase in workload for the team due to an upcoming event and new product launch, Mark has been allocated a project to run. This will require him to work at least 10 hours every week until the project end date.
Why are these scenarios are not a genuine casual work arrangement?
- The days and hours of work are regular.
- There is an expectation that work will continue and there is an obligation to provide or accept work on either party.
Both examples are common in today’s businesses. Big and small. The team get busy or are short staff. Some time passes by and the casual worker is doing a good job and have proven themselves to be reliable so why not give them more work or why change something that is working well. The employee is also enjoying having a regular pay, so why would they change that. All the while no-one thinks to update the employment agreement and talk about how that may affect the terms and conditions of employment.
It doesn’t matter whether it turns into, 10 hours consistently every week on variable days, or 4 hours every Wednesday, or 40 hours Monday to Friday. If it is regular and there is an expectation that it will continue, then it is not casual employment. If there is an end date in sight like the third example then you should consider a fixed term arrangement. If there is no end in sight it is most likely permanent employment.
So what do you do?
If you are faced with a long term not so casual, casual employee, the first thing to do is review the hours the so-called casual has been working and the length of time he or she has been working. Ask yourself these 3 questions:
- At what point did the hours of work go from ‘as and when required’ to being consistent and regular?
- Are they getting paid at a comparable rate to those on permanent or fixed term agreements?
- What does the future of my team/business look like and where does this so called ‘casual’ employee fit into that?
Be honest and pragmatic when you answer these questions. Your answers will vary.
Experience has shown me that each casual arrangement is unique due to the way it came about and how it evolves. The steps you take to reconcile it back to being a genuine casual arrangement or move onto being a fixed term or permanent arrangement will differ. This is why you can’t use cookie cutters in HR. The situation can be similar but so different – just like the people involved.
The risk of doing nothing?
Employers can be exposed to lost wages if the employee have been paid at a lower ‘casual rate’ compared to their permanent peers. You may also be exposed to costs and lost wages due to leave not being administered correctly.
How do you prevent this from happening to you?
- Be aware of what is happening in your business by carrying out regular reviews of the casual hours being worked and paid out each month and quarter.
- Give Payroll some guidelines so they can be your ‘canary in the coal mine’ and monitor hours for you.
- Have a few casuals you can call upon when you need them. Not just one you use all the time.
- Train your managers on what ‘casual’ really means. Fixed term employment agreements are a great alternative when you have a genuine reason for it.
- Ask your employer about the likely hours and how the casual arrangement is likely operate before signing the agreement.
- Seek out advice from someone with a good understanding of employment agreements and terms. Some lawyers and HR professionals (like us!) do give free advice on this sort of stuff.
- Ask for a review date of the employment arrangement – every 3 or 6 months.
- If you have concerns after you have started that it is not really a casual arrangement, then talk with your manager about this.
Catherine Stapleton is the Principal HR Consultant at Stapleton Consulting. Based in Te Awamutu, she advises employers of small to medium organisations throughout the Waikato on how to attract, engage and retain great people.
Need More Information?
If you have further questions on this topic or any other employment matter, please contact Catherine Stapleton via [email protected].
Check out our other blog posts for tips and tricks about making employment easier so you can see the forest for the trees.
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(Please note that the information contained in this article is of a general nature and is not a substitute for legal advice. Also the names used in this article are used to hide the identity of those involved.)