There have literally been hundreds of times that we have been contacted by employers who say they want a ‘casual’ employment agreement for their employee, or they want an updated agreement for their ‘casual’ employee.
When we get into it we regularly find that what may have started out, originally, as a totally intermittent arrangement between the employer and the employee where the employer was free to offer work occasionally and the employee could accept or decline the offer as they pleased, has now changed.
It now turns out that the employer offers work on a regular basis but the hours can be variable each time the employee works and there is a general expectation that the employee has to be available to work. Things have changed so that they can’t just turn down an offer of work as they originally did and they in turn have an expectation of working certain guaranteed hours.
This type of situation is relatively common and is a major reason why employers can get into difficulty with things such as dismissals, holiday pay or annual leave and now the “availability” provisions of the Employment Relations Act.
Holiday pay/annual leave
Someone who goes from being a genuine casual employee to becoming a regular part timer with variable hours can trigger changes in the obligation to grant annual leave or holiday pay.
For example a casual may be paid on a ‘pay as you go basis’ (8% paid weekly/fortnightly) whereas a part timer with regular hours is entitled to 4 weeks paid annual leave at the end of 12 months. At any time these obligations can change because of the actions of both parties.
Where the employer has paid holiday pay on a pay as you go basis, but not in accordance with the Act, then there is a specific part of the Holidays which says that even if the employer has paid the holiday pay, if the subsection doesn’t apply, the employer must still allow the employee annual holidays in accordance with the Act and pay for them again.
This is a real double whammy and employers need to be aware of their obligations and employees should be aware of their rights.
In terms of a dismissal, the employer can simply stop offering a casual employee hours to work with no problem, as long as they meet the obligations with respect to notice, because in the case of a true casual, each period of work is a period of employment and it stands on its own. There is generally no obligation on an employer to offer any further work once that one period of engagement has been completed.
It is vitally important that the employer and the employee regularly review the document that records the facts of their employment relationship.
If there is a material change to some aspect of the relationship then it should be recorded in writing.
This could include such things as a wage rate change, an hours of work change, the type of work being offered (or expected) changing, effectively anything that fits into one of the aspects that has to be recorded in writing in an employment agreement. Those matters are set out in the Employment Relations Act and include the name of both the employer and the employee; a description of the work to be performed by the employee (not necessarily a full job description, but a general indication at least); an indication of where the work is to be performed (a street or farm address, or work throughout New Zealand if applicable); the agreed hours of work or an indication of the arrangements relating to the times the employee is to work (i.e. whether the employee is to work certain specified hours or as part of a regular roster system, for example); the wages or salary payable; and, a plain language explanation of the services available for the resolution of employment relationship problems.
If there is any change to any of those particulars then they should be recorded as being agreed and stored with the original agreement.
Updating the written agreement
Remember also that if there is any material change to any of those particular matters, or anything else that is fundamental to an employment agreement such as specific terms and conditions of employment, then this may necessitate a change to the written agreement. Also, both parties need to be aware that there is a legal requirement to have a clause in the agreement setting out what will happen in the event of the sale and purchase of the business.
This may cause a potential redundancy or restructuring obligation to apply. Even if it is only effectively a matter of the employer’s name changing there is an obligation to set out the rules that will apply in such a situation.
We would recommend that whenever there is a change to one of those fundamentals, then the agreement be reviewed with a view to updating the original terms and conditions of employment. In practice it is probably a good time to do this when the pay rate is reviewed – review the whole document for any changes.
If the employer or the employee is in any doubt about what their obligations or rights are in such a situation then it is best to seek advice, even if it is only for reassurance.